Sterling gained some respite on short covering amid hopes for decisive Brexit policy.
The Euro was undermined by another batch of weak Euro-zone manufacturing PMI data, reinforcing expectations of ECB easing with EUR/USD at 7-week lows.
The dollar index posted 8-week highs before fading slightly as all majors struggled for support with commodity currencies losing ground.
Sterling gained some respite on short covering amid hopes for a decisive Brexit policy by the new government.
The Swiss franc maintained a strong tone with the yen resilient despite speculation over further Bank of Japan easing.
Global equities were underpinned by expectations of global monetary easing. Crude failed to capitalise on favourable inventories data and registered net losses. Silver posted 13-month highs before fading slightly.
Political rhetoric dominated on Wednesday as markets continued to monitor domestic and European commentary amid a new UK government. The European Parliament reiterated that a backstop was needed for the Northern Irish border with markets still sceptical over the ability to secure a clear strategy for leaving the EU at the end of October.
Boris Johnson was confirmed as the Prime Minister and there were major changes to the Cabinet with Sajid Javid appointed as Chancellor with expectations of a looser fiscal policy. Sterling gained some support from hopes that the government would take a decisive stance with GBP/USD briefly moving above 1.2500 while GBP/EUR rallied above 1.1200.
Unease over the risks of a confrontational approach and ‘no-deal’ outcome curbed the potential for further currency gains with EU officials very cautious towards fresh negotiations. There were also concerns that a weak House of Commons position would trigger instability. GBP/EUR settled around 1.1200 on Thursday with GBP/USD trading around 1.2475.
|12:45||ECB Rate Decision(JUL)||-||0.00%|
|13:30||USD Durable Goods Orders Ex Transportation(JUN)||0.10%||0.40%|
|13:30||USD Durable Goods Orders (M/M)(JUN)||0.30%||-1.30%|
|13:30||USD Goods Trade Balance(JUN)||-||-75.05B|
|15:00||USD New Home Sales Change(JUN)||1.90%||-7.80%|
|15:30||USD Crude Oil Inventories||-||-3.116M|