Dollar sentiment remained fragile.
Dollar sentiment remained fragile, but it was able to resist losses as other majors were unable to take advantage.
The Euro was hampered by lower German yields and Brexit reservations with political concerns also continuing to undermine Sterling.
Silver advanced to 2-week highs while iron ore prices hit a record high and gold held steady. Commodity currencies held firm, but USD/CAD was able to hold above the important 1.3000 level. Oil prices failed to hold intra-day gains as markets remained uneasy over underlying global demand conditions.
Equities were held in tight ranges as trade uncertainty persisted and curbed support. Cryptocurrencies stabilised after sharp weekend losses with regulatory concerns still an important factor.
The Euro was unable to make any headway ahead of Monday’s New York open with German yields moving lower on the day. Expectations of a dovish ECB policy and a potential rate cut during the third quarter hampered the single currency and Brexit uncertainty was also a factor in curbing support given fears over a disruptive ‘no-deal’ outcome in October.
There were no significant domestic developments during Monday with markets continuing to fret over weak economic conditions and political uncertainty. These two elements remained closely linked given persistent fears that Brexit uncertainty would undermine the economy. After a firm start, Sterling gradually drifted lower with GBP/EUR again testing the 1.1100 level while GBP/USD dipped to lows near 1.2500.
The latest labour-market data is due for release on Tuesday with markets monitoring both unemployment and average earnings. Any evidence of a weakening employment trend and slower pace of wages growth would further undermine sentiment, especially as it would further erode expectations of any interest rate increase by the Bank of England.
There were overnight reports that the EU was considering possible concessions to avoid a ‘no-deal’ Brexit, but that the UK stance risked a hardening of the stance. Sterling was little changed on Tuesday with GBP/EUR again testing 1.1100 and close to 6-month lows.
|09:30||GBP Average Earning Including Bonus(MAY)||3.00%||3.10%|
|09:30||GBP Claimant Count Change(M/M)(JUN)||22.9K||23.2K|
|09:30||GBP Unemployment Rate(MAY)||3.80%||3.80%|
|10:00||CPI (EU Norm) Prelim MM(JUN)||-||0.20%|
|10:00||CPI (EU Norm) Prelim YY(JUN)||-||0.80%|
|10:00||CPI (EU Norm) Final MM*(JUN)||0.10%||0.10%|
|10:00||CPI (EU Norm) Final YY*(JUN)||-||0.80%|
|10:00||German ZEW Survey (Current Situation) (JUL)||6||7.8|
|10:00||German ZEW Survey (Economic Sentiment)(M/M)(JUL)||-5.9||-21.1|
|10:00||Euro-Zone Trade Balance(MAY)||-||15.7B|
|13:00||BoE Gov Carney Speaks||-||-|
|13:30||USD Core Retail Sales (M/M)(JUN)||0.30%||0.50%|
|13:30||USD Export Price Index (M/M)(JUN)||-||-0.2|
|13:30||USD Import Price Index (M/M)(JUN)||-||-0.30%|
|13:30||USD Advance Retail Sales (M/M)(JUN)||0.60%||0.50%|
|13:30||CAD Foreign Securities Purchase(MAY)||-||-12.80B|
|14:15||USD Capacity Utilization(JUN)||78.00%||78.10%|
|14:15||USD Industrial Production(JUN)||-||0.40%|
|15:00||USD Business Inventories(MAY)||-||0.50%|
|15:00||NAHB Housing Market Index(JUL)||-||64|
|17:20||FOMC Robert Kaplan Speech||-||-|
|18:00||USD FOMC Member Powell Speech||-||-|
|20:30||Fed President Evans Speaks||-||-|
|21:00||USD TIC Net Long-Term(MAY)||-||46.9B|