Euro Strengthens as Draghi, Carney, and Yellen in Focus

Sterling strengthened at the start of yesterday’s session on reports that the Conservatives and DUP would announce a formal agreement.

Previous Day's Market Highlights

Sterling strengthened at the start of yesterday’s session on reports that the Conservatives and DUP would announce a formal agreement.
 
US Durable Goods Orders contracted 1.1% in May, more than the 0.6% forecast. Growth in core goods orders also disappointed expectations. The dollar fell on the release. Euro-dollar briefly regained 1.1200, trading within a 50-pip range around that level throughout the day.
 
After dollar demand saw sterling-dollar retrace from 1.2760 in the morning session, cable continued to meet resistance around 1.2750 throughout the day. Sterling-euro failed to break 1.1400.   
 
The euro weakened yesterday as ECB President Draghi defended current monetary policy and warned against tightening policy too soon. 

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1370 1.1554 1.1277 2.40%
GBP / USD 1.2724 1.2978 1.2589 2.30%
EUR / USD 1.1191 1.1296 1.1109 1.66%
GBP/AUD 1.6730 1.7494 1.6612 5.04%
GBP / NZD 1.7415 1.8273 1.7385 4.86%
GBP / CAD 1.6857 1.7536 1.6721 4.64%

Today's Market Highlights

The euro has strengthened against both the pound and the dollar this morning as ECB President Draghi speaks from 09:00 BST, emphasising that the Bank’s policy has been effective and that factors weighing on inflation will likely be temporary. Euro-dollar is up around 0.5% and sterling-euro is down around 0.4%.
 
The Bank of England will be in focus this morning as Governor Carney speaks on the Financial Stability Report (10:30, 11:00 BST). Any signs of increased risks to financial stability could put the pound under pressure, particularly given heightened uncertainty. Carney recently struck a more dovish tone on monetary policy than that taken by some of his colleagues on the MPC.
 

Key this afternoon will be comments from Fed Chair Yellen (18:00 BST), who speaks at the British Academy in London. An upbeat view despite recent softer data could support the dollar.
 
Other Fed speakers include Harker (16:15 BST), who speaks at the European Economics & Financial Centre in London, and Kashkari (22:30 BST), who speaks at a town hall event in Michigan. 

Today's Economic Calendar

Time Currency Release Consensus Previous
09:00 EUR ECB President Draghi Speaks
09:30 AUD RBA Deputy Governor Debelle Speaks
10:30 GBP Financial Stability Report
11:00 GBP BoE Governor Carney Speaks
14:00 USD S&P/Case-Shiller Home Price Indices YoY (Apr) 5.9% 5.9%
15:00 USD Consumer Confidence (Jun) 116.0 117.9
16:15 USD Fed Member Harker Speaks
18:00 USD Fed Chair Yellen Speaks
22:30 USD Fed Member Kashkari Speaks