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By Associated FX Analysis Team

Kantox currency update: US dollar falters with the euro on the rise

Published June 8, 2018

The dollar is pulling back from six-month highs against a basket of the most traded currencies, on track to its first negative week in two months, weighed by the sharp decline of US treasury bonds’ yields and a renovated euro strength.

The common currency seems to have shrugged off concerns about the eurosceptic government in Italy and the recent signals of an economic slowdown amid market speculation that the ECB may announce the end of the monetary stimulus program after next week’s monetary policy meeting.

EUR/USD: struggling to regain the 1.1800 level. The euro ticked up on Thursday, fuelled by investors’ expectations of ECB’s monetary policy normalization, to hit two-week highs at 1.1840, before pulling back to levels immediately below 1.1800. As at London market opening times, the EUR/USD is trading at 1.1775.

GBP/USD: pulling back from 1.3475The sterling advanced for the third consecutive day on early Thursday’s trading although gains were capped after the release of a contingency plan for the Irish border drafted by the UK Government. This draft plan has exposed the internal differences within the cabinet and has increased concerns about the possibility of an unfriendly outcome. As a consequence, the pound retreated to session lows below 1.3400. As at London market opening times, the GBP/USD is trading at 1.3405.

USD/JPY retreats from 110.00. The dollar rebound from 108.00 area was capped at 110.00 and the pair has given away gains over the last session, weighed by the decline of US Treasury yields. As at London market opening times, the USD/JPY is trading at 109.40.

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