Kantox currency update: the dollar, buoyed by the US–N. Korea summit
The dollar has returned on a positive trend, especially against the safe-haven Japanese yen, boosted by hopes that US President Trump’s meeting with North Korean leader Kim Jong Un will contribute to calm tensions between these two nuclear powers.
EUR/USD: capped below the 1.1800 level. The euro opened the week on strong footing and advanced to session highs at 1.1820, before losing steam through the day and pull back to 1.1750 area. As at London market opening times, the EUR/USD is trading at 1.1760.
GBP/USD: pulls back below 1.3400. The pound depreciated across the board on Monday after UK industrial production showed its sharpest decline in years, increasing concerns about a soft patch in UK economy, and extended its reversal from last week highs at 1.3470, to the 1.3350 area so far. As at London market opening times, the GBP/USD is trading at 1.3350.
USD/JPY jumps to 3-week highs at 110.50. The dollar bounced up at 109.20, and advanced to fresh highs at 110.50 on Monday, fuelled by higher risk appetite on investors’ hopes that the Trump-Kim summit will contribute to easing political tensions. As at London market opening times, the USD/JPY is trading at 109.40.
In the Calendar Today
At 08:30 GMT National Statistics will release the UK ILO unemployment and the average earnings of the three months previous to April, which might have a moderate impact on the pound.
At 12:30 GMT we will be attentive to the US Consumer Prices Index. After having recorded a weaker than expected inflation in April, the dollar would need strong CPI figures to put pressure on the Fed to accelerate their monetary tightening pace.
08:30 GMT UK: ILO unemployment rate (3M) (Apr)
Previous: 4.2% Expected: 4.2%
08:30 GMT UK: Avg. Earnings excluding Bonus (3M/Yr) (Apr)
Previous: 2.9% Expected: 2.9%
12:30 GMT US: Consumer Prices Index (YoY) (May)
Previous: 2.5% Expected: 2.8%