GBP Slipped Lower Against USD In Subdued Trade On Monday

The euro inched higher against the dollar in thin trade on Monday, as volumes remained light with markets in the U.K. and the U.S. closed for public holidays. Investors remained cautious amid uncertainty whether the Federal Reserve will begin to scale back its USD85 billion-dollar-a-month asset purchase program later this year. The euro found support after European Central Bank executive-board member Joerg Asmussen said on Monday that the bank should be cautious about cutting its deposit rate below zero: "monetary policy is not an aspect of economic policy." Recent comments by ECB president Mario Draghi indicated that the bank was open to negative interest rates.

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GBP/USD
The pound slipped lower against the U.S. dollar in subdued trade on Monday. In the U.K., a report showed that house prices rose at the fastest rate in six years in May as a shortage of properties in London and a credit-easing program by the Bank of England boosted prices. London-based property researcher Hometrack said that average house prices rose 0.4% in England and Wales, the biggest monthly increase since May 2007, with prices in London jumping 0.9%.
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USD/JPY
The dollar was steady near two-week lows against the yen on Monday, but moves remained minor with markets in the U.K. and the U.S. closed for public holidays. The yen remained supported after Japan’s Nikkei extended last week’s steep declines on Monday amid concerns that the Federal Reserve could begin to scale back its USD85 billion-dollar-a-month asset purchase program later this year. Meanwhile, the minutes of the Bank of Japan’s April meeting showed that a “few” policymakers are concerned that inflation may fall short of the bank’s 2% target through March 2016. The minutes also appeared to indicate that policymakers are divided over rising government bond yields, with some calling for measures to stabilize the bond market.
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USD/CAD
The U.S. dollar inched higher against the Canadian dollar on Monday, but gains were limited in subdued trade as markets in the U.K. and the U.S. remained closed for public holidays. Market sentiment stabilized on Monday, but investors remained wary amid concerns that the Federal Reserve could scale back its USD85 billion-dollar-a-month asset purchase program this year. Investors were looking ahead to the outcome of Wednesday’s Bank of Canada’s policy setting meeting, Governor Mark Carneys last before taking over as governor of the Bank of England.
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