Dollar Softer on Improving Risk Appetite

The US dollar is softer this morning. A fairly light calendar includes Euro Retail Sales and US Factory Orders.

Previous Day's Market Highlights

Sterling headed lower Monday morning as Brexit uncertainty continued to exert pressure, despite a surprise to the upside in the UK’s Manufacturing PMI reading. The euro saw little movement as the Eurozone’s Unemployment Rate fell from 8.6% to 8.5%. A jump in the US’s ISM Manufacturing PMI also had a limited currency impact. German politics stabilised overnight after earlier concerns that Merkel’s coalition partner could resign—these concerns had weighed on the euro during the day’s session.
 
Exchange rates were little changed. Sterling-euro continued to struggle to make headway above 1.13, while sterling-dollar traded within the 1.31-1.32 bracket and euro-dollar failed to sustain a break below 1.16. Sterling-kiwi pushed higher to hit around six-week highs.
 
Overnight, the RBA kept interest rates on hold at 1.5%, as was expected. Markets are not pricing in another rate hike until late next year. The statement highlighted US trade policy as an uncertainty.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1288 1.1471 1.1247 1.95%
GBP/USD 1.3145 1.3473 1.3049 3.15%
EUR/USD 1.1645 1.1853 1.1510 2.89%
GBP/AUD 1.7815 1.7981 1.7395 3.26%
GBP/NZD 1.9578 1.9622 1.8905 3.65%
GBP/CAD 1.7327 1.7791 1.7168 3.50%

Today's Market Highlights

Improving risk appetite and euro gains have seen a softer US dollar this morning. Overall, today’s calendar is again fairly quiet. The Eurozone releases low-level Producer Price Index and Retail Sales figures (10:00 BST), which will likely have limited impact on the euro.

In the afternoon, the Canadian Manufacturing PMI (14:30) is forecast to slip, while the US releases monthly Factory Orders (15:00) and New Zealand eyes the Global Dairy Trade Price Index. Later in the day, ECB Member Praet will give the keynote speech at the National Bank of Romania’s Gala Dinner. The lack of major releases could keep exchange rates around current levels.
 
Tomorrow is a holiday in the US for the Fourth of July. As a result, the Fed meeting minutes will be released on Thursday instead of the usual Wednesday

Today's Economic Calendar

Time Currency Release Consensus Previous
10:00am EUR Producer Price Index YoY (May) 2.4% 2.0%
10:00am EUR Retail Sales YoY (May) 1.4% 1.7%
2:30pm CAD Markit Manufacturing PMI (Jun) 55.4 56.2
3:00pm USD Factory Orders MoM (May) 0.0% -0.8%
NZD Global Dairy Trade Price Index -1.2%
5:00pm EUR ECB's Praet Speaks

Caxton