Previous Day's Market Highlights
Euro-dollar briefly regained 1.18 as the dollar initially softened, but it later reversed course to return to the 1.17-1.18 band. Sterling-dollar tested highs in the upper half of the 1.34-1.35 range before heading lower towards 1.34.
While the calendar was largely quiet, the pound saw some morning gains around some relatively hawkish comments during MPC Member Vlieghe’s re-appointment hearing, while the Inflation Report Hearing included a discussion of Q1 data and whether GDP could see a revision higher.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
Softening inflation was one of the factors that reduced market expectations of a May BoE rate hike and continues to pose a risk to rate hike expectations—and thus the pound—going forward. Today’s lower-than-expected CPI print of 2.4% has seen some additional sterling weakness, pushing sterling-dollar to yet another fresh 2018 low below 1.34.
In the afternoon, preliminary Markit Services and Manufacturing PMIs (14:45) and New Home Sales (15:00) are in focus for the dollar. Positive figures could add to recent strength. Attention will largely be on this evening’s Fed minutes (19:00) as investors look for signals that the Fed is on track to hike rates next month as is widely expected and any signals that a fourth hike could be in play this year. Minutes that do little to shift market expectations may have a muted impact on the dollar, so investors will keep an eye out for any surprises.
Overnight, trade data could provide some support for the kiwi dollar.
Today's Economic Calendar
|09:30||GBP||CPI YoY (Apr)||2.5%||2.5%|
|09:30||GBP||Core CPI YoY (Apr)||2.2%||2.3%|
|14:45||USD||Markit Services PMI (May)||54.9||54.6|
|14:45||USD||Markit Manufacturing PMI (May)||56.5||56.5|
|15:00||USD||New Home Sales MoM (Apr)||0.679M||0.694M|
|15:30||USD||EIA Crude Oil Inventories (18 May)||-1.567M||-1.404M|
|19:15||USD||Fed Member Kashkari Speaks|
|23:45||NZD||Trade Balance MoM (Apr)||$200M||$-86M|