EUR is outperforming on ZEW surprise – Scotiabank

FXStreet Insights Team FXStreet

The Euro (EUR) is strong, up 0.4% against the US Dollar (USD) and outperforming all of the G10 currencies on the back of a better than expected ZEW investor sentiment survey. The survey is seen as a leading indicator for German industrial production, leading by roughly 12 months, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret note.

EUR is lifting spreads with added support from ECB comments

"The data are adding to the ongoing moderation in easing expectations for the ECB and helping to deliver fundamental support to the EUR via yield spreads. ECB policymakers are also helping to cement the shift in rate expectations, with neutral messaging from Governing Council members Kazaks and Simkus."

"The Euro (EUR) has broken above the psychologically important 1.18 level, offering little in terms of resistance ahead of the July 1 high at 1.1829. The RSI is bullish, at 61, but still shy of the overbought threshold at 70. We see little in terms of resistance between the July high and the 1.19 level. We look to a near-term range bound between 1.1750 and 1.1850."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD slides below 1.3250 after failing to break through 23.6% Fibo

The GBP/USD pair meets with a fresh supply during the Asian session on Wednesday and moves away from a nearly two-week high around the 1.3275 region, touched the previous day. Spot prices currently trade around the 1.3235 zone, down 0.20% for the day, as traders look to speeches from Bank of England Governor Andrew Bailey and Federal Reserve Chair Kevin Warsh for a fresh impetus.

EUR/USD tests daily lows near 1.1380; focus on ECB Forum

EUR/USD remains under pressure below 1.1400 on Wednesday amid extra gains in the US Dollar. In addition, softer-than-expected inflation data in Germany and the Euroland fuel expectations of a less aggressive ECB, contributing to the downside mood.

Gold clings to daily gains beyond $4,000 ahead of Warsh

Gold manages to regain composure and advance past the key $4,000 per troy ounce on Wednesday, reversing two daily drops in a row. The yellow metal’s decent bounce comes despite uncertainty surrounding Iran and growing expectations of a Fed rate hike continue to support the Greenback for now.

ISM Manufacturing PMI expected to signal continued expansion in the US

Attention shifts to Wednesday’s release of the June ISM Manufacturing Purchasing Managers Index, one of the most closely followed indicators of activity in the US manufacturing sector and an important barometer of the broader economy. Markets expect the headline index to remain unchanged at 54.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The European Central Bank Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Federal Reserve, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.