Sterling lost gains as political concerns increased again with unease over US-EU trade tensions undermining the Euro.

US CPI inflation data was slightly below consensus forecasts, but the dollar was resilient after the data and rebounded to make net gains as other majors struggled for support.

Sterling lost gains as political concerns increased again with unease over US-EU trade tensions undermining the Euro.

Risk appetite remained fragile on US-China trade concerns with equity markets losing ground while US bond yields retreated to near 21-month lows.

Commodity currencies lost ground with firm employment data failing to support the Australian dollar.

Oil prices declined once again on demand concerns with no support from the latest inventory data, although reports of attacks in the Gulf of Oman triggered gains on Thursday.

Precious metals were resilient despite slight losses on US dollar gains. Cryptocurrencies made gains amid demand for alternative assets.

Sterling initially gained an element of support from political considerations as the opposition parties looked to pass legislation that would prevent a ‘no-deal’ Brexit. Conservative Party leadership contender Johnson also stated that he was not aiming for a ‘no-deal’ outcome which helped support sentiment. Recent Bank of England rhetoric also helped underpin the UK currency in relative terms with a GBP/USD peak just above 1.2750 while GBP/EUR held near 1.1230.

There was, however, a fresh retreat late in the European session after the Labour Party motion to block a ‘no-deal’ Brexit was rejected in the House of Commons. With the dollar also recovering, GBP/USD dipped back below 1.2700.

The latest RICS housing index recovered to -10 from -23 and the strongest reading since October which offered some reassurance over trends. Political developments will remain important with the first round of the Conservative Party leadership election on Thursday and the UK currency was little changed in early Europe with GBP/EUR around 1.1229.

Economic Calendar

Expected Previous
07:00 Germany CPI (Y/Y)(MAY) 2.00% 1.40%
07:00 Germany CPI (M/M)(MAY) 1.00% 0.20%
07:00 Germany Harmonised CPI (Y/Y)(MAY) 2.10% 1.30%
07:00 Germany Harmonised CPI (M/M)(MAY) 1.00% 0.30%
07:30 CHF PPI (Y/Y)(MAY) - -0.60%
07:30 CHF PPI (M/M)(MAY) - 0.30%
08:30 CHF SNB Interest Rate Decision -0.75% -0.75%
08:30 SNB Monetary Policy Assessment (Q/Q) - -
09:00 SNB press conference - -
10:00 Euro-Zone Industrial Production (M/M)(APR) -0.30% -0.30%
10:00 Euro-Zone Industrial Production (Y/Y)(APR) -0.80% -0.80%
12:00 OPEC Meeting - -
13:30 USD Export Price Index (M/M)(MAY) 0.5 0.2
13:30 USD Import Price Index (M/M)(MAY) 0.70% 0.20%
13:30 CAD New Housing Price Index (M/M)(APR) - 0
13:30 USD Continuing Jobless Claims 1.680K 1.682K
13:30 USD Initial Jobless Claims 216K 218K
23:30 NZD Business NZ PMI(MAY) - 53

*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.