EUR/USD Hits New 2018 Low

A softer EUR saw EUR/USD fall below 1.18. Brexit headlines, central bank speakers, and US data are in focus.

Previous Day's Market Highlights

Euro-dollar hit a new 2018 low in the 1.17-1.18 band, its lowest levels since 18 December. This marks an over 6% decline since the rate hit three-year highs above 1.25 in February. The euro was softer as markets digested headlines that Italy’s Five Star and the League coalition might ask the ECB to forgive €250B in Italian bonds.
 
Sterling was subdued against the dollar but managed to hold above Tuesday’s lows, later making overnight progress above 1.35 as the press reported that the government plans to tell the EU that it intends to stay in the customs union. Sterling-euro made some further gains in the 1.14-1.15 band.
 
The pound performed less well against the commodity currencies, giving up 1.80 against the Aussie after having risen to 1.81 the previous night on disappointing Australian wage data. The Aussie made further gains last night despite a mixed jobs report. The Unemployment Rate rose to 5.6% from 5.5%, but Employment Change was higher than projected and the Participation Rate also rose.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1461 1.1569 1.1302 2.31%
GBP/USD 1.3528 1.4315 1.3451 6.04%
EUR/USD 1.1802 1.2400 1.1763 5.14%
GBP/AUD 1.7954 1.8476 1.7909 3.07%
GBP/NZD 1.9637 1.9755 1.9247 2.57%
GBP/CAD 1.7275 1.7999 1.7224 4.31%

Today's Market Highlights

While the UK calendar is light, investors will watch any further Brexit headlines, particularly around the customs union. ECB VP Vítor Constâncio speaks twice today, first delivering the closing remarks at the Colloquium organised by the ECB in his honour and then giving the opening address at the ECB’s third annual macroprudential policy and research conference.
 
The US releases weekly Initial Jobless Claims (13:30), expected to remain well below the 300K level consistent with a strengthening labour market, if to tick up a touch form 211K to 215K. A softer Philadelphia Fed Manufacturing Survey is also forecast.
 
Fed Member Kashkari, one of the more dovish members, speaks this afternoon (15:45) and will likely maintain his recent tone. MPC Member Haldane will deliver the closing remarks at the Economics Statistics Centre of Excellence’s Conference on Economic Measurement this evening (17:00). Fed Member Kaplan rounds out the day’s speakers.

Today's Economic Calendar

Time Currency Release Consensus Previous
11:30 EUR ECB VP Constancio Speaks
13:00 EUR ECB VP Constancio Speaks
13:30 USD Initial Jobless Claims (11 May) 215K 211K
13:30 USD Philadelphia Fed Manufacturing Survey (May) 21.0 23.1
13:30 USD Foreign Securities Purchases (Mar) $3.00B $3.96B
15:30 CAD BoC Review
15:45 USD Fed's Kashkari Speaks
17:00 GBP MPC Member Haldane Speaks
18:30 USD Fed's Kaplan Speaks

Caxton