EUR unaffected by political turmoil at home

EUR unaffected by political turmoil at home

Sinduja Venkat

Good morning and welcome to today’s foreign exchange market commentary on 16th of July. 

Here are MyCurrencyTransfer.com’s top 5 currency highlights:

  • GBP up for more volatility ahead of Wednesday’s July minutes
  • EUR unaffected by political turmoil at home
  • USD movement undecided ahead of Bernanke testimony
  • USD/JPY on the defensive during Asian session
  • USD/CAD delicately positioned owing to bullish greenback

CURRENCY RATES OVERVIEW 

GBP/EURO – 1.1505
GBP/USD – 1.5119
GBP/CHF – 1.4229
GBP/CAD – 1.5704
GBP/AUD – 1.6389
GBP/ZAR – 14.9346
GBP/JPY – 150.2655
GBP/HKD – 11.7288
GBP/NZD – 1.9196
GBP/SEK – 9.9699

Mid-market rates as of 2013-07-16 16:00 UTC

Key releases in the next 24 hours that may affect currency date:

Australia: AUD RBA Policy Meeting – June Minutes
Europe: EUR German ZEW Survey (Economic Sentiment) (JUN), EUR Euro-Zone ZEW Survey (Economic Sentiment) (JUN), EUR German ZEW Survey (Current Situation) (JUN)
United Kingdom: GBP Consumer Price Index (YoY) (MAY), GBP Core Consumer Price Index (YoY) (MAY), GBP Consumer Price Index (MoM) (MAY), GBP Producer Price Index Output Core n.s.a. (YoY) (MAY), GBP Producer Price Index Output n.s.a. (YoY) (MAY), GBP Retail Price Index (YoY) (MAY)
New Zealand: No Data
United States of America: USD Consumer Price Index Ex Food & Energy (YoY) (MAY), USD Consumer Price Index (YoY) (MAY), USD Building Permits (MoM) (MAY), USD Consumer Price Index Ex Food & Energy (MoM) (MAY), USD Consumer Price Index (MoM) (MAY), USD Housing Starts (MoM) (MAY)
China: No Data
Canada: No Data
Japan: JPY Industrial Production (YoY) (APR F), JPY Machine Tool Orders (YoY) (MAY F), JPY Merchandise Trade Balance Total (Yen) (MAY)

GBP up for more volatility ahead of Wednesday’s July minutes

The release of lower than expected UK June inflation figures earlier on Tuesday didn’t garner much attention from the GBP however market expectations point that the pound sterling is likely to fluctuate ahead of the July BOE minutes due for release on Wednesday. Analysts have indicated that the GBP that the current base-case scenario is that further above-target CPI strength in the UK will more likely affect the medium-term value of the GBP, just as a weaker overall position of the currency in comparison with its peers and relatively fast inflation rates have forced the GBP to stay weak through most of 2013.

EUR unaffected by political turmoil

With investors’ sentiment in the USD’s favor following events last week, the greenback lost half a cent against GBP and the EUR, although risk assets performed well on the back of a sharp fall in US interest rates. As US market continue to remain focused on QE tapering, the recent CPI releases in the US are viewed as significant in order to justify tapering as early as September. Eurozone on the other hand is shadowed by political concerns emanating from Spain and Portugal however this is not reflected in the currency markets as the Euro continues to trade at above 1.3000 against the dollar.

USD movement undecided ahead of Bernanke testimony

Bernanke’s testimony on Wednesday is expected to shed more light into the thought process behind the Federal Reserve Board. Members of the Fed appear to be evenly distributed between the dove and hawk camp, with the Bernanke, Yellen and other doves on one side, while on the other half a more hawkish view has been adopted. The bets towards a taper in September remain unclear which is being reflected by the constant stumble of the U.S. Dollar since Bernanke’s comments last week. If the market got Bernanke’s tone right there seems to be still some room for the currency to rebound.

USD/JPY on the defensive during Asian session

The USD/JPY pair did not witness significant volatility during Asian trading with the BoJ failing to spark any prolonged recovery measures, which ultimately providing a pause ahead of the Bernanke speech later on. The BoJ had released its minutes that which repeated that the CPI is likely to gradually turn positive. Moreover, the BoJ will continue with quantitative and qualitative monetary easing, to achieve the price stability target of 2 per cent. The USD/JPY has now settled at the 99.15 region.

USD/CAD delicately positioned owing to bullish greenback

The USD/CAD pair is delicately positioned according to market analysts as investors continue to remain bullish with regards to the USD. The EUR/CAD pair on the other hand has advanced through to the 1.37 region following political turmoil in the Euro area.

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