The Bank of England voted 9-0 to leave the Bank Rate on hold last week but did mention rising uncertainty related to Brexit. The release promoted only a brief drop in Sterling with GBP/USD later topping out at a six-week high on Friday at 1.3144.
Brexit related headlines were mixed although the most notable move was to the upside after EU Brexit Minister Barnier said a deal within six-to-eight weeks is feasible.
Looking ahead, UK inflation figures are due on Wednesday followed by retail sales on Thursday.
The Dollar Index hit its lowest level since July 31st at one stage on Friday at 94.36 but rallied into the weekend after stronger-than-expected prints for industrial production and Michigan Sentiment. Comments from Chicago Fed President Evans will also have provided support after he said the US economy is firing on all cylinders.
The Dollar Index is nursing a minor loss this morning with the US-China trade spat seeing little sign of improvement over the weekend.
Looking ahead, Empire manufacturing is out layer today, housing data on Wednesday, Philly Fed on Thursday and PMI on Friday.
The European Central Bank stood pat on policy last week although did make some minor downward adjustments to their growth forecasts. An optimistic tone from Draghi was the main takeaway however and helped EUR/USD hit the 1.17 level on Thursday before falling back. Euro Zone CPI data is out shortly with no change expected from the flash readings.
Consumer confidence is due on Thursday while manufacturing and service PMI’s are out on Friday.
USD/JPY climbed above 112 on Friday to its best level since August 1st with the perceived safe-haven currency tracking broader risk sentiment rather than domestic impulses which were limited. Gains on Wall Street provided a weight heading into the weekend with the S&P 500 back above 2,900 and flirting with multi-month highs.
The focus may turn back home this week however with the Bank of Japan due to meet on Wednesday ahead of Friday’s CPI data.
Swiss National Bank President Jordan said last week that he is looking forward to other central banks tightening policy. His comments did weigh on the Franc and helped EUR/CHF move back above 1.13 although this proved short lived with the pair midway between the 1.12-1.13 levels this morning. Thursday’s policy decision is not expected to yield any shift in the current stance.
The Australian Dollar was choppy last week as investors reacted to developments in the US-China trade spat and stronger-than-expected Aussie jobs data. AUD/USD topped out at a one-week high on Wednesday at 0.7231 but pulled back on Friday as reports suggested that US President Trump is looking to press ahead with the $200 Bln Chinese tariff list. Looking ahead, the RBA minutes are out tomorrow followed by the leading index on Wednesday.
NAFTA headlines remain the main driving force behind moves in the Canadian Dollar with upside seen last week coming on the back of reports that Canada is ready to offer concessions on dairy. USD/CAD hit a two-week low on Wednesday at 1.2974 before finding support and reclaiming the 1.30 handle before the weekend. Looking ahead, manufacturing sales are out on Wednesday ahead of CPI and retail sales on Friday.
NEW ZEALAND DOLLAR
Having dropped to its lowest level versus the Greenback since February 2016 last Monday, the New Zealand Dollar did find some support later in the week although before trade tensions resurfaced. News that US President Trump is looking to press ahead with the $200 Bln Chinese tariff list will limit any upside in the pair for now with Wednesday’s GDP release the main data focus.
The Swedish Krona fell into the weekend, weighed by weaker-than-expected GDP data on Thursday and CPI on Friday. This pushed USD/SEK back above 9.0 after having dropped to a five-week low before the data on Thursday morning at 8.9275. Looking ahead, a quiet wee macro wise with only unemployment data due on Thursday.
The Norwegian Krone finished last week as the stronger of the Scandi currencies with NOK/SEK reclaiming the 1.09 handle mid-week and extending to a two-week in the early exchanges this morning. The Norges Bank Regional Survey released last Tuesday pointed to robust output growth over the next half of the year and will have been seized upon by those calling for the Riksbank to raise rates this week with policymakers set to decide on Thursday.
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