Kantox currency update: the euro trims losses in a calm market
The euro has regained lost ground, buoyed by stronger than expected German Industrial production figures and comments by ECB official Sabine Lautenschläger, in favour of starting the QE tapering in 2018.
The dollar pulled back against its main peers, with investors increasingly concerned about the news pointing out to the possibility of a new missile test by North Korea, which could reactivate geopolitical tensions in an extremely sensitive area.
EUR/USD: one-week highs near 1.1800. The euro recovery from last week lows at 1.1670 has extended to session highs at 1.1790. At London market opening times, the EUR/USD is trading at 1.1775.
GBP/USD pound regains 1.3100 area. The pound advanced on Monday, favoured by dollar weakness and extended its recovery, putting in some distance from last week lows at 1.3025 and reaching the upper range of 1.3100. At London market opening times, the GBP/USD is trading at 1.3160.
USD/JPY remains trapped between 112.20 and 113.25. The dollar has remained trading within the last nine days range, supported above 112.20/35 and limited below 113.25. At London market opening times, the USD/JPY is trading at 112.60.
In the Calendar Today
At 08:30 GMT we will have a string of UK indicators, with special interest on the UK trade balance and manufacturing production data. The pound has been extremely sensitive to the negative indicators last week thus any more bad news for UK economy might lead to further GDP depreciation.
At 23:50 GMT the Cabinet Office will release the Japanese Machinery orders, a leading indicator of business capital spending and business confidence. Strong machinery orders tend to have a positive impact on the yen and vice versa.
08:30 GMT UK: manufacturing Production (MoM) (Aug)
Prev: 0.5% Cons: 0.3%
08:30 GMT UK: Total Trade Balance (Aug)
Prev: £-2.872B Cons: £-2.800B
23:50 GMT JP: Machinery Orders (MoM) (Aug)
Prev: 8.0% Cons: 1.1%