Kantox currency update: dollar rises further; euro hits fresh 2018 lows
The dollar advanced unexpectedly after Trump’s decision to withdraw from the Iran nuclear deal, and reached fresh 4-month highs against a basket of the most traded currencies, while the euro dives further on concerns about political uncertainty in Italy.
This new source of tension with Iran has pushed oil prices higher, increasing the yields of U.S. long-term bond, ultimately increasing dollar’s attractive for speculative investors.
EUR/USD dives below 1.1900. The euro extended its decline against the dollar, on investors’ concerns that the snap election in Italy might lead to a victory of the eurosceptic parties, and accumulates a nearly 5% slump from mid-April highs at 1.2400 to four-month lows near 1.1800. At London market opening times, the EUR/USD is trading at 1.1825.
GBP/USD: pushing against support area at 1.3500. Sterling’s attempts to bounce up from three-month lows at 1.3500 area have been capped below 1.3600, and the pair retreated again, although it remains above the mentioned support area, with the investors awaiting the conclusion of the BoE monetary policy meeting due on Thursday. At London market opening times, the GBP/USD is trading at 1.3505.
USD/JPY: picks up again and approaches 110.00. The dollar is trading higher on early Wednesday’s trading, after three days trading sideways around 109.00 and approaches 110.00 resistance area again, fuelled by the widening U.S. – Japanese bond yields differential. At London market opening times, the USD/JPY is trading at 109.70.
In the Calendar Today
Today we have second-tier indicators in the calendar, only worth mentioning the Interest rate decision of the Reserve Bank of New Zealand and the speech of Fed MPC member Bostic, although the market will be more attentive to the most relevant BoE monetary policy decision in the last year, which will be released tomorrow.
17:15 GMT FOMC Member Bostic’s speech
21:00 GMT RBNZ Interest Rate decision
Previous: 1.75% Expected: 1.75%
21:00 GMT RBNZ Press Conference