The USD gained against its most of its major counterparts today as the light fundamental news sees focus return the possible impending rate hike. The most notable US data saw existing home sales print their highest reading since before the ’08 crisis (M/M 5.49M vs. Exp. 5.40M) to continue to bolster sentiment in a day otherwise light on news. As such, EUR/USD continues its recent decline to fall back below the 1.0900 handle, while USD/CAD is at its highest level since March 2009 after breaking through stops to the upside at 1.3000. This coincides with commodity currency weakness generally, with gold breaking below USD 1100 and WTI Sep’15 futures falling below USD 50.00.
Elsewhere, GBP outperforms today as focus fell on the BoE, seeing EUR/GBP continue to trend lower and break below the 0.7000 handle driven by hawkish comments by BoE’s Miles, who said that he expects inflation to converge towards the 2% target at the end of 2015. The release of the most recent BoE minutes revealed a 9-0 vote and while a number of MPC members see increasing inflation risks which are skewed to the upside, the minutes also warned that GBP strength could suppress inflation. The rhetoric released in the minutes are more or less a reiteration of the most recent MPC comments and as such proved to be somewhat uneventful, to see GBP continue its recent strengthening as the time of a BoE rate hike appears closer.
Looking ahead, this evening sees the RBNZ rate decision with market participants expecting a cut, while tomorrow sees UK retail sales, US weekly job numbers and comments from ECB’s Weidmann.
Elsewhere, GBP outperforms today as focus fell on the BoE, seeing EUR/GBP continue to trend lower and break below the 0.7000 handle driven by hawkish comments by BoE’s Miles, who said that he expects inflation to converge towards the 2% target at the end of 2015. The release of the most recent BoE minutes revealed a 9-0 vote and while a number of MPC members see increasing inflation risks which are skewed to the upside, the minutes also warned that GBP strength could suppress inflation. The rhetoric released in the minutes are more or less a reiteration of the most recent MPC comments and as such proved to be somewhat uneventful, to see GBP continue its recent strengthening as the time of a BoE rate hike appears closer.
Looking ahead, this evening sees the RBNZ rate decision with market participants expecting a cut, while tomorrow sees UK retail sales, US weekly job numbers and comments from ECB’s Weidmann.
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