USD Retreats Despite Positive CPI Surprise
The US dollar continues trades lower once again today as the sell-off from the FOMC minutes on Wednesday resumes. The details in the minutes have bolstered expectations of a Fed rate cut at the upcoming meeting in July. Yesterday, USD reversed losses in response to the June CPI which came in higher than expected at 2.1% on the core reading. USD index trades 96.57 last, still well below the 97.10 resistance level.
Euro Still Under Pressure
EURUSD has seen higher levels against USD again today, benefiting from the current weakness in the greenback. A lack of tier one domestic data has seen quiet trading for the single currency this week which has mainly been driven by USD flows. EURUSD trades 1.1264 last, capped against resistance at the level formed by prior swing highs in May.
GBP Rally Remains Intact
GBPUSD is continuing its recovery battle against USD today as bulls fight to keep price above the 1.2439 level support. Positive data earlier in the week has kept sentiment skewed to the upside, despite the ongoing Brexit uncertainty which poses risks to the outlook. For now, focus remains on further downside, with the recover likely to prove shallow.
SPX500 Hits Fresh All-time Highs (Again!)
Risk assets have enjoyed further upside this week as the dovish FOMC meeting minutes have once again lit a fire under equities. The prospect of a Fed rate cut has seen the SPX500 breaking out to all-time highs yet again this week with the index trading 3007.58 last. Along with renewed optimism over US-China trade negotiations, the outlook is firmly positive for equities.
Safe Havens Down As Equities Soar
Safe havens have had a difficult day today given the strong risk-on tone. Despite USD weakness, JPY has fallen against the dollar as higher equities prices have capped safe-haven inflows. Gold has fallen back too, retracing almost all of its initial gains against USD so far today. XAUUSD trades 1405.96 last, down from earlier highs of 1412.43. USDJPY trades 108.45 last, as the recovery off the 107.90 level continues.
Crude Continues Higher
Oil prices remain supported today as the market continues to grind higher in the wake of yet another bullish report from the EIA which showed that US crude stores were down for a fourth consecutive week last week. Ongoing tensions in the Middle East between the UK/US and Iran are also keeping oil well bid as traders anticipate supply disruptions. Crude trades 60.73 last, with price remaining above the recently broken 60.07 level.
CAD Rises, AUD Drops
USDCAD has moved sharply lower today, breaking below the 1.3037 level earlier to trade its lowest level since October last year. A combination of a weaker USD, optimistic BOC, and higher oil prices, is keeping CAD well supported, a theme which is likely to continue in the near term.
AUDUSD has turned a little lower this morning as the .70 level once again finds sellers stepping in. This has a been a major pivot for AUDUSD over the year and despite several attempts recently, price has yet to hold above the level longer than a few days. With USD trading lower and risk sentiment improving, we could see a topside break over the coming sessions, though the fundamental backdrop for AUD is not currently supportive.