Overall global risk appetite held firm after President Trump announced a 2-week delay in increasing tariffs on Chinese exports.

Overall global risk appetite held firm after President Trump announced a 2-week delay in increasing tariffs on Chinese exports.

US bond yields advanced to fresh 1-month highs and Asian equities posted 6-week highs. USD/JPY also posted 6-week highs as defensive yen demand faded with net US dollar gains.

The Euro was undermined by selling ahead of Thursday’s ECB policy meeting with EUR/USD testing support below 1.1000.

Oil prices dipped sharply after speculation that President Trump could ease sanctions on Iran with the Canadian dollar also losing ground.

Demand for precious metals remained subdued given improved risk conditions.

EUR/USD stabilised just above 1.1000 on Thursday with consolidation and position adjustment ahead of the ECB policy decision. There are strong expectations of a cut in interest rates with the decision on bond purchases, forward guidance and Draghi’s commentary likely to be crucial for the Euro. There is likely to be a surge in Euro volatility following the meeting.

The Scottish High Court ruled that the suspension of parliament was unlawful, but the government announced that it would appeal to the Supreme Court. The case will not be heard until Tuesday and there was no immediate move to bring the House of Commons back into session while the government released its documents relating to ‘no-deal’ Brexit implications.

German Chancellor Merkel stated that there was still every chance of an orderly Brexit, but Sterling was unable to extend recent gains even with a firmer tone surrounding global risk appetite. There was strong GBP/USD resistance near 1.2370 with a retreat to near 1.2320 as the US currency regained ground while GBP/EUR settled around.

The headline RICS housing survey recovered to -4% for August from -9% previously, although political uncertainty was still cited as a negative factor for the sector and the UK currency drifted slightly lower on Thursday ahead of the ECB meeting.

Economic Calendar

Expected Previous
07:00 Germany CPI (M/M)(AUG) -0.20% 0.50%
07:00 Germany CPI (Y/Y)(AUG) 1.40% 1.70%
07:00 Germany Harmonised CPI (M/M)(AUG) -0.10% 0.40%
07:00 Germany Harmonised CPI (Y/Y)(AUG) 1.00% 1.10%
07:30 CHF PPI (Y/Y)(SEP) - -1.70%
07:30 CHF PPI (M/M)(SEP) -0.20% -0.10%
10:00 Euro-Zone Industrial Production (M/M)(JUL) - -1.60%
10:00 Euro-Zone Industrial Production (Y/Y)(JUL) -1.20% -2.60%
11:00 OPEC Meeting - -
12:45 Deposit Facility Rate -0.40 -0.40
12:45 ECB Rate Decision(SEP) - 0.00%
13:30 USD CPI Ex Food & Energy (M/M)(AUG) 0.20% 0.30%
13:30 USD CPI Ex Food & Energy (Y/Y)(AUG) - 2.20%
13:30 USD CPI (Y/Y)(AUG) - 1.80%
13:30 USD CPI (M/M)(AUG) 0.30% 0.30%
13:30 CAD New Housing Price Index (M/M)(JUL) - -0.1
13:30 USD Initial Jobless Claims - 217K
13:30 ECB Press Conference - -
19:00 Monthly Budget Statement(AUG) - -120.0B
23:30 NZD Business NZ PMI(AUG) - 48.2

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.