24/ 07/ 2019

Euro Plumps two-month Low Ahead of ECB, Pound Under Pressure

The European majors were on the move on Tuesday, with a lack of economic data out of the Eurozone and economic data out of the U.S on the lighter side, corporate earnings provided direction on the day. There was also support from expectations of an ECB rate cut on Thursday ahead of the FED’s anticipated rate cut next week.  On the geopolitical front, the U.S – China trade front, news of face to face meetings scheduled for next week was also positive for the majors. From UK, a Boris Johnson victory in the UK leadership race failed to dampen the mood.

Boris Johnson wins the six-week Conservative leadership race and is set to become the next UK Prime Minister. Johnson won 66% of the votes – 92,153, to Hunt’s 46,656. Now, Britishers fear Johnson to execute a hard Brexit in order to make the UK-EU divorce happen on/before October 31 deadline. Several UK Ministers and Officials who strongly disagree for a hard Brexit have already displayed their stance, proclaiming to resign from the office in such a case. Current Prime Minister Theresa May will leave office tomorrow after meeting Queen Elizabeth, who’s expected to formally appoint Johnson afterwards.

While the focus will remain on corporate earnings and monetary policy, economic data out of the Eurozone and the U.S will also influence. The lack of stats From UK will leave the Pound in the hands of the next British PM and Brexit chatter.

23/ 07/ 2019

US Dollar & Euro Flat as Traders Await Fed and ECB Rate Decisions

The euro declined against the U.S. dollar on Monday, as foreign exchange investors were waiting to see by how much and how fast policymakers might ease policy, beginning with the European Central Bank on Thursday. British currency was weighed down against dollar ahead of the result of the Conservative party’s leadership election and the British Prime Minister which will be announced later today & surely influence the Pound.

It’s yet another particularly quiet day on the economic calendar, with no material stats released through the Asian session. A lack of stats left the majors on the defensive, with the Dollar finding support on bets that the FED would cut rates by a smaller amount than had been hoped. Geopolitical risk added further support for the Greenback through the morning, with the Theresa May’s replacement due to be announced. There’s also hopes of progress on the U.S – China trade talks to factor in.

22/ 07/ 2019

Week Ahead | Dollar Drifts Higher as Tension in the Gulf Builds

Sterling, Dollar and Euro were the major focuses last week as they took turn in suffering selloffs. The Pound was pressured by increasing worries over no-deal Brexit. While it ended the week as the weakest one, late recovery argues that the worst could be past for Sterling for the near term. Similarly, Dollar ignored solid economic data and declined on Fed cut expectations. But then, there was no follow through selling towards the end of the week. Late fall in Euro, on the other hand, suggested that more downside is in favor in the common currency for this week.

Some reports will provide with little data of relevance, as Germany will release the Buba Monthly Report while the US will publish the Chicago Fed National Activity Index for June, previously at -0.05. Meanwhile, mounting tensions in the Strait of Hormuz, as Iran seized a UK oil tanker, will likely trigger risk-averse related movement at the weekly opening.

The economic calendar is very light today but heavy weight events lie ahead. It’s a big week ahead for the markets. Earnings, economic data, Iran, trade war chatter, and the ECB are all in focus.

18/ 07/ 2019

US Data Amongst Market Movers Today

The GBP/USD pair has bounced from a fresh over two-year low of 1.2381 achieved early in the London session, now trading in the 1.2450 region as the dollar fell out of the market’s favor during the American afternoon. The Sterling stumbled on the back of dismal UK data, as inflation remained flat monthly basis in June. The EUR/USD pair has recovered from a fresh weekly low of 1.1199, to hit an intraday high of 1.1233 in US trading hours, as data from the world’s largest economy came in much worse than expected.

For the EUR, it’s a quiet day ahead on the economic calendar. With no material stats due out on the day, the focus will be on Philly FED manufacturing PMI numbers due out of the U.S later today. Outside of the stats, market sentiment towards the U.S economy and updates from the U.S – China trade talks will also be in focus.We can expect the Dollar to be sensitive to the numbers. Barring particularly dire numbers, we expect the weekly jobless claims figures to have a muted impact on the Dollar.

It’s another big day ahead for the Pound, with the UK’s retail sales figures due out later this morning.  Outside of the numbers, the result of the Conservative Party leadership race is just around the corner. Any chatter from Parliament will also need to be considered.