Kantox currency update: euro appreciates against a weaker dollar
The advanced to two-week highs on Monday, favoured by a softer dollar after the US employment report showed weaker than expected wage inflation in March and the rally on oil prices, that has boosted commodity currencies, like AUD and CAD, adding negative pressure on the dollar.
The current euro strength, however, is likely to be challenged on Wednesday after the European Central Bank’s monetary policy meeting. With the Eurozone economy showing clear signals of deterioration, the ECB is expected to maintain its dovish forward guidance which could hurt demand in the common currency.
EUR/USD: two-week highs above 1.1250. The euro appreciated on Monday to break above the top of the last two weeks´ trading range, reaching intra-day highs at 1.1280. As at the London market opening times, the EUR/USD is trading at 1.1265.
GBP/USD crawls higher and approaches 1.3100. The pound appreciated on Monday, buoyed by May’s efforts to reach a cross-party agreement to avoid a hard Brexit, moving away from Friday’s lows at 1.2990, to reach levels near 1.3100. As at London market opening times, the GBP/USD is trading at 1.3075.
USD/JPY: upside capped at 112.00 area. The dollar failed again to extend its recovery beyond 112.00 resistance area and retreated from Friday’s highs at 111.85 to return to the lower range of 111.00. As at London market opening times, the USD/JPY is trading at 111.65.
In the Calendar Today
Today, we have only second-tier indicators in the calendar, thus we expect a transition day ahead of an eventful Wednesday.