Kantox currency update: dollar picks up; yen rises on rising tensions in Korea
The dollar extended its recovery against the euro and the pound on a calm summer trading session, still buoyed by the strong employment report seen last week, which has increased expectations of a rise in inflation that will rekindle Fed’s monetary normalisation plan.
The yen has outperformed the rest of the major currencies over the latest sessions, amid growing risk aversion, on the back of the escalating tensions between the United States and North Korea.
EUR/USD reversal from 1.1900 extends beyond 1.1800. Euro pullback from last week highs at 1.1900 extended on Tuesday below 1.1800, to hit one-week lows at 1.1715. At London market opening times, the EUR/USD is trading at 1.1745.
GBP/USD: dives below 1.3000. The pound depreciated for the fourth consecutive day, weighed by the deteriorating outlook for the UK economy and the dovish turn of the BoE, to hit prices below 1.3000 for the first time in almost three weeks. At London market opening times, the GBP/USD is trading at 1.3005.
USD/JPY returns below 110.00. Dollar recovery attempts have been capped at 111.00, and the greenback has dropped sharply over the latest sessions, weighed by market concerns about the escalating tensions with North Korea, reaching 7-week lows at 109.75. At London market opening times, the USD/JPY is trading at 110.00.
In the Calendar Today
At 12:30 GMT the U.S. Q2 labour costs and non-farm productivity will show the trends of inflation and business health which, in absence of more relevant indicators, might have a minor impact on the dollar.
12:30 GMT U.S: Non-Farm Productivity (Q2)
Prev: 0.0% Cons: 0.7%
12:30 GMT U.S: Unit Labour Costs (Q2)
Prev: 2.2% Cons: 1.2%