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Kantox currency update: Euro and pound pick up on post-Brexit correction

EuroThe euro and the pound sterling extended their gradual recovery on Wednesday, as the market starts to discard a Brexit-induced global financial crisis, and favoured by downbeat home sales figures in the U.S.

EUR/USD: extends recovery beyond 1.1100: After a 4.5% sell-off after the UK referendum that pushed the pair to 1.0910 low, the euro has been going through a mild recovery, reaching week highs at 1.1130 on Wednesday At London market opening times, the EUR/USD is trading at 1.1095.

GBP/USD: fresh highs above 1.3500: Sterling’s recovery from 31-year lows at 1.3115 hit on Monday extended on Wednesday to week highs above 1.3500, as ears about the consequences of the Brexit eased. . At London market opening times, the GBP/USD is trading at 1.3405.

USD/JPY remains capped below 103.00: The dollar attempted to extend its recovery from last week lows su-100.00 to be capped once again at 103.00 level, and pull back to the mid range of 102.00. At London market opening times, the USD/JPY is trading at 102.50.

 

In the Calendar Today

At 09:00 GMT Eurostat is expected to release Eurozone June’s Consumer Prices Index figures first estimate. After two consecutive months of decline, inflation is expected to have improved somewhat in June, due to the pick up of energy prices, which could have a positive influence on the euro.

At 15:00 GMT Investors’ focus will be on BoE Carney’s speech. Carney is expected to outline the Bank’s post-Brexit perspectives for UK economy and the eventual strategy to mitigate its consequences. The sterling might go through volatility spikes as Carney speaks.

 09:00 GMT       EUR         Consumer Prices Index – Prel. (YoY) (Jun)
Prev: -0.1%       Cons: 0.0%

 15:00 GMT       GBP         BoE Carney’s speech