Daily Forex Wrap: USD Gains Ground Across The Board

The USD-index has gained ground on the major pairs across the board with the EUR exhibiting broad-based weakness amid ongoing uncertainty regarding Greek finances with Greece still unable to strike common ground with their creditors. However, on a more positive note, Greece are said to be able to make tomorrow’s IMF EUR 750mln repayment to the IMF despite sources suggesting a Senior Greek official called US Treasury Secretary Jack Lew and said that Greece may not pay back to IMF. In terms of other commentary, participants will be looking out for any further comments from the Eurogroup meeting, however, the German Finance Minister already shutdown expectations of a possible resolution to come between Greece and its creditors.

Today’s BoE rate decision was moved to an unfamiliar day from its usual day of Thursday and was a non-event as expected. However, despite GBP/USD trading lower in the first half of the session, the pair reversed course and printed fresh 4 month highs as investors begin to turn their attention to Wednesday’s QIR report where the Bank of England’s are widely expected to show that rates will rise over the next year and that after two months of zero inflation, higher readings are likely to come in the next few months, according to the Sunday Times. Furthermore, RANsquawk sources report real money buying in GBP/USD which has also supported the pair.

NZD was the session’s laggard as participants continued to bring forward rate cut expectations, with OIS markets now pricing in an 46% chance of a 25bps rate cut at the June meeting. NZD/USD broke below 0.7400 and is on course for its largest decline since March 6th, with tech cross-related selling spurred by NZD/JPY breaking below its 200 DMA (0.8923) and AUD/NZD broke above 1.0700 to the upside to trade at 2-month highs.