Daily FX wrap – EUR performs well on a quiet Monday with little reaction seen to the US Empire Manufacturing.
In a very uneventful session in terms of fundamental data and news flow, once again the main loser has been GBP. In the crosses EUR/GBP is up nearly a percent and heading toward the 29th July 2013 high of 0.8764, above that another level to look out for on the upside is the 25th of February high of 0.8808 which could also act as resistance. EUR has also performed relatively well against USD and JPY, up 35% and 60% respectively. In commodity currencies USD/CAD fell to a low of 1.2910 (roughly 49 pips) after Russian Energy Minister Novak stated that Russia will work with Saudi Arabia to achieve price stability. Genscape also released their bi-weekly report where Cushing inventories for the week ending 12th August posted -350,092bbl for the week. The most notable data point of the session came in the form of US Empire State Manufacturing Index (-4.21 vs. Exp. 2.50), with the data failing to simulate any sustained market reaction, given the component’s mixed nature.
Tomorrow we slightly more action in the shape of US and UK CPI’s, which will be the 1st month we may see some of the the effects in the UK from the weaker GBP after the EU referendum, but many analysts note that it may take a few months for the aforementioned weaker GBP to filter through to the inflation readings. Overnight we will also be looking out for the RBA monetary policy meeting minutes, this is usually largely a reiteration of the post rate comments but traders and analyst will be looking out for the tone of the report. Sticking with antipodean currencies, the GDT figures are also set to be released tomorrow, and futures have been paid up leading into the release and this could be priced in the NZD, but regardless the readings may inspire some volatility, also from New Zealand we see employment change statistics. The reading has risen in 3 straight months and the expected change is forecast to be around the 0.70% area.