With a light calendar kicking off the week, much of today’s FX price action has been a continuation of the fallout from last week’s events. Following the higher than expected nonfarm payroll report from the US and in a paring of some ECB announcement inspired losses, the USD index has strengthened throughout the session, to see the greenback gain against major pairs. As such notable softness was seen in both GBP/USD and EUR/USD, with the former falling back below the 1.5100 handle, while in terms of the latter Goldman Sachs (N:GS) have raised their 3, 6 and 12 month forecast for the pair in the wake of last week’s less dovish than expected announcement from ECB’s Draghi.
The other notable news in FX markets today has been the impact from commodity weakness, with WTI and Brent both seeing significant softness today to see Brent futures reach their lowest level of the year after OPEC failed to cut their output. This saw the likes of CAD, NOK and RUB all fall against the USD, with commodity prices particularly in focus for the RUB given their rate decision later this week, whereby surveyed analysts are split in their opinion as to whether the Central Bank of Russia will cut rates, with some expecting as much as a 100bps cut.
Looking ahead, tomorrow sees UK industrial and manufacturing production, Eurozone GDP, scheduled comments from ECB’s Constancio and Makuch as well as API crude oil inventories.