Good Morning All,
The halfway point of the week is upon us and the Euro’s march higher continues. EUR/USD has now broken through the 6 month high and could look to test the 12 month high around 1.1250.
Much of the these gains can be attributed to risk profile in the market as the Trump/FBI/Russia controversy continues to play out. The US Dollar index has dropped to a fresh 6 month low on the back of this which coincides with the EUR/USD rally. The market will look to Consumer Price data from the Euro-Zone at 10am this morning to see if the Euro has the legs to carry on running higher.
GBP/USD remains above the 1.29 level, with Sterling lacking the necessary oomph to crack that psychological barrier that is 1.30. UK employment data is released at 9.30am with Cable most likely capped to 1.2950 before the figures are released. No huge change is expected in the job’s data, but in this crazy market we cannot rule anything out.
Yesterday’s increase in consumer prices didn’t give Sterling the boost that many would have thought – as we know higher inflation normally leads to a need to hike interest rates, but with an election just around the corner and Brexit still to come, an increase in UK interest rates are probably a long way off.
We have another quiet day on U.S data, but as mentioned already the continued speculations around Trump are enough to provide some volatility on the Dollar. The Dollar is now at its weakest point since the election as it remains to be seen whether Trump will be able to deliver on his campaign promises to make America great again.
Have a good day!