EUR/USD fell below the 1.17-support as euro weakness took over from dollar strength. After testing the next support near 1.1550, the pair rebounded as tensions on Italy eased. The Fed and the ECB might decide on the next EUR/USD move.
The test of the EUR/GBP 0.87 area was again rejected as Italian tensions eased. Furthermore, Brexit progress remains scant. PM May's long-awaited "backstop" plan left the EU unimpressed and UK eco data remain mixed, at best.
USD/JPY corrected lower with Italy causing a flight to the safe yen haven. The pair rebounded again from 108-area. Risk sentiment generally improved, but remains prone to volatility.
Since the May policy meeting, the CZK lost further ground. However, the trend probably reversed at the start of the month on the back of strong wage growth, fuelling market expectations - which were later strengthened by the CNB governor - of an additional rate hike.
The Polish zloty stabilized lately after considerable losses this month and the previous. Within the CE region, the zloty is most vulnerable to rising US yields/a firmer dollar. The NBP has no intention at all to normalize policy any time soon as it made clear in its last June-meeting.
EUR/HUF trended further north, finally leaving the 305-315 trading range. Hungarian monetary policy is expected to remain loose for the foreseeable future whereas the ECB in June probably prepares the next step to normalization.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.