The forex markets are pretty steady in Asian session so far. Dollar jumped yesterday on reviving expectation of rate hike by Fed. But the greenback is struggling to find decisive momentum yet. Currently, fed fund futures are pricing in 19% chance of rate hike by September and 47% chance by December. Dollar index's break of 97 handle was seen as a sign of near term strength. However, EUR/USD is staying well above near term support at 1.0911, GBP/USD above equivalent support at 1.2794. USD/CHF is also held below last week's higher at 0.9893. More evidence is still needed to confirm the underlying momentum of the greenback.
The IMF in its quarterly World Economic Outlook revised lower its global economic growth forecast to 3.1% for 2016 and 3.4% for 2017, down from 3.2% and 3.5% projected in April. These were based on the assumption that the EU-UK deal after Brexit does not lead to a large increase in economic barriers. In case of a negotiation breakdown, global growth could slow to 2.8% for both years. The world lender also trimmed growth in the UK, forecasting its growth to reach 1.7% and 1.3%, respectively, in 2016 and 2017, down from 1.9% and 2.2% projected previously. According to the IMF, Brexit has added "downward pressure to the world economy at a time when growth has been slow". The impact of such decision would be the biggest on "Europe, especially the UK". That said, growth in the UK would still outperform that in Eurozone countries including Germany, France and Italy.
On the data front, Australia Westpac leading index dropped -0.2% mom in June. German PPI, Eurozone current account and Swiss ZEW expectation will be released in European session. But the focus is on UK job data. US will release crude oil inventories later in the day.