GBP/USD dropped back below 1.31 this morning having crept up to its best level since September 27th overnight at 1.3134. Sterling has failed to derive much support from a raft of Brexit related press over the weekend, including comments from EU Commission President Juncker who said the chance of a Brexit deal has risen in the last few days.
Looking ahead, industrial production, GDP and trade figures are out on Wednesday where we also expect comments from Bank of England Chief Economist Haldane.
The Dollar Index hit a six-week high last Wednesday at 96.13, boosted by stronger than expected US service data and hawkish remarks from Fed Chair Powell. Friday’s payrolls report was less impressive and took some momentum away from the Dollar, but the index remains within touching distance of 96 this morning.
FOMC speakers are in abundance this week with Chicago Fed President Evans due later today. On the data front, PPI figures are due on Wednesday, CPI on Thursday and import prices on Friday.
The Euro has got off to a slow start this week with EUR/USD slipping below 1.15 this morning. The single currency has struggled as European equity markets opened firmly in the red and Italian government bond yields pushed higher.
We also saw a weaker print for Euro Zone Sentix investor confidence in recent trade. The Italian budget dispute will likely remain a source of uncertainty this week while the ECB minutes due Thursday will also be closely watched.
USD/JPY powered above 114 last week for the first time since November but failed to sustain the move as the Yen rallied into the weekend on risk aversion. The theme continued this morning with the Yen at the top of the G10 pile as European cash equity markets slumped.
Looking ahead, current account data is out tomorrow, core machinery orders on Wednesday and PPI on Thursday.
Weaker-than-expected CPI data releases on Friday pushed USD/CHF to its highest level since August 20th at 0.9958. Unemployment figures released this morning were in line with expectations meanwhile and prompted little reaction in the Franc. The data calendar for the remainder of the week is empty.
The Australian Dollar is trading at its lowest level versus the US Dollar since February 2016 – AUD/USD hit a low of 0.7042 this morning. Rising trade tensions between the US and China has been the main drag on the Antipodean currency while domestic data releases provided some support with a rise in retail sales and wider than expected trade surplus.
NAB confidence indicators are out tomorrow followed by Westpac consumer sentiment on Wednesday and home loans on Friday. RBA Assistant Governor Ellis also speaks on Wednesday.
The Canadian Dollar spent most of last week giving back gains seen after the USMCA announcement. USD/CAD has risen again this morning with the pair hitting a fresh one-week high at 1.2998.
Reaction to Friday’s employment data was choppy meanwhile as employment rose more than expected but wages slowed year-on-year.
Housing starts are out tomorrow alongside possible comments from the Bank of Canada’s Wilkins while building permits follow on Wednesday.
NEW ZEALAND DOLLAR
The New Zealand Dollar finished last week as the one of the weakest G10 currencies and has continued the trend this morning – NZD/USD fell its lowest since January 2016 at 0.6425.
This week electronic card sales are out tomorrow, FPI on Wednesday and PMI on Thursday.
The Swedish Krone hit its lowest level versus the US Dollar since September 7th on Friday at 9.10. Data releases seen earlier in the week failed to offer much support with a slowdown in service PMI and a miss for manufacturing PMI.
Looking ahead, unemployment figures are out on Wednesday followed by CPI on Thursday.
The Norwegian Krone saw a modest softening last week despite the lack of any notable domestic impulses – USD/NOK hit a three-week high on Friday at 8.2915. Manufacturing production data released this morning was slightly stronger-than-expected but largely ignored as investors look ahead to Wednesday’s CPI data.
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