Kantox currency update: euro recovery stalls ahead of key data
Euro recovery lost steam on Monday and the US dollar ticked up after several days on the defensive, with investors turning more cautious ahead of the release of the Eurozone manufacturing and Chinese GDP figures later this week, which will show the trends of the global economy and might set the direction for currency markets.
The Australian dollar has dropped sharply following the release of minutes of the Reserve Bank of Australia’s latest monetary policy meeting showing that the bank has considered trimming interest rates for the first time since the 2008 financial crisis.
EUR/USD recovery stalls above 1.1300. The euro was capped yesterday at 1.1325 after having rallied from 1.1185 lows on early April, although the pair, so far remains steady near three-week highs near 1.1300. As at the London market opening times, the EUR/USD is trading at 1.1305.
GBP/USD remains limited below 1.3100. The pound edged up on Monday, as the agreement to delay the Brexit deadline has eased fears about an immediate departure from the Union, although, so far, the pair seems unable to consolidate above 1.3100. As at London market opening times, the GBP/USD is trading at 1.3075.
USD/JPY testing resistance at 112.00 area. The dollar remains buoyed by investors’ optimism about a trade agreement between the US and China, which has weighed on the safe haven yen, pushing the US dollar to test 2019 highs at 112.10. As at London market opening times, the USD/JPY is trading at 111.90.
In the Calendar Today
Today In the UK, we will be attentive to the ILO Unemployment rate and the average earnings data. With the unemployment rate at historic lows, the focus will be on the evolution of the salaries to assess the near-term trends on inflation.
In the Eurozone, the ZEW Institute will release its monthly economic sentiment survey, a gauge measuring institutional investors’ optimism about the economic outlook that is expected to have deteriorated further in April, which might have a negative impact on the euro.
In Japan, the Ministry of Finance will release the Merchandise Trade Balance, and the import and export figures for March. Japan is an exporter country and therefore, these readings might have some impact on the Yen.
08:30 GMT UK: ILO Unemployment Rate (3M) (Feb)
Prev: 4.0% Cons: 3.9%
08:30 GMT UK: Average earnings Excl. bonus (3M/Yr) (Feb)
Prev: 3.4% Cons: 3.4%
09:00 GMT EZ: ZEW Economic Sentiment Survey (Apr)
Prev: -2.5% Cons: 1.2%
23:50 GMT JP: Adjusted Merchandise Trade Balance (Mar)