Kantox currency update: euro extends recovery ahead of GDP data
The euro has opened the week on solid pace and has appreciated for the fourth consecutive day against the dollar, to reach the top of the last two weeks trading range, at 1.1700 area, ahead of the release of the Eurozone GDP data.
The dollar ticked up against the Japanese yen, buoyed by U.S. yields, while the pound remains vulnerable, with the UK government negotiating the Brexit deal in a context of growing isolation.
Today, investors will be attentive to the ECB conference in Frankfurt, with the presence of ECB President Mario Draghi, Fed Chair Janet Yellen, BoE Governor Mark Carney and BoJ Governor Haruhiko Kuroda.
EUR/USD testing recent range top at 1.1690. The euro has traded higher against the dollar during the last sessions, to reach the upper limit of the last two weeks’ trading range, right below 1.1700. At London market opening times, the EUR/USD is trading at 1.1690.
GBP/USD pulls back below 1.3100. Sterling’s attempt to break above 1.3200 was capped on Friday at 1.3230 and the pair retreated again on Monday, returning to levels sub 1.3100 and approaching key support area at 1.3040. At London market opening times, the GBP/USD is trading at 1.3095.
USD/JPY: picking up from 113.00. The dollar ticked up on Monday, favoured by higher U.S. yields, to extend its recovery from last week lows near 113.00 although it is still far from early November highs at 114.75. At London market opening times, the USD/JPY is trading at 113.50.
In the Calendar Today
At 09:30 GMT we will be attentive to the UK Consumer Prices Index figures. UK inflation reached 5-year highs at 3% in September but is expected to recede over the next months. The pound would need consumer prices to remain high to continue its recent recovery.
At 10:00 GMT At Eurostat will release the preliminary reading of the Q3 Gross Domestic Product. The advanced estimation showed that the economy accelerated to a 2.5% yearly growth. Relevant revisions of these figures might have some impact on the euro.
At 10:00 the focus will be on the meeting of the presidents of the ECB, BoE, Federal Reserve and Bank of Japan in Frankfurt. Draghi, Carney, Yellen and Kuroda will speak today and their comments might have some impact in the currency markets.
09:30 GMT UK: Consumer Prices Index (YoY) (Oct)
Prev: 3.0% Cons: 3.1%
10:00 GMT EZ: Gross Domestic Product (YoY) (Q3)
Prev: 2.5% Cons: 2.5%
10:00 GMT ECB: Draghi’s speech
10:00 GMT BoE: Carney’s speech
10:00 GMT BoJ: Kuroda’s speech
10:00 GMT Fed: Yellen’s speech