The US dollar has been weaker over the European morning so far on Thursday as the bullish impact from Tuesday’s data beat seems to have subsided. A higher than expected ISM Non-Manufacturing reading boosted USD sentiment. However, with equities continuing their march higher, the impact has faded a little. USD index trades 97.73 last down from prior 97.85 highs.
EU Economy To Weaken
EURUSD has been firmer against USD today, benefiting from weakness in the greenback. The absence of key data this week has left EUR in limbo. Today, traders received the latest set of EU economic forecasts which made for miserable reading. The EU economy is forecasted to endure a period of “subdued growth” and “muted inflation” following the seven-year rebound just seen. Nevertheless, EURUSD is in the green today, trading 1.1076 last.
BOE In Focus
GBPUSD has been higher today also, helped along by weakness in the US dollar. In the UK, the general elections campaign is well underway and the latest polls suggest that the race between the conservative party and the labor party (main opposition) is far closer than many expected it would be. The impact for Brexit of a Labour win would likely be that a second referendum could be held and Brexit could potentially be canceled. As such, traders are watching the elections update closely. The BOE meeting today is the main market focus. While a rate cut is an outside chance, the market will be keen to hear the bank’s latest assessment in light of the new Brexit delay. GBPUSD trades 1.2866 last.
Risk Rally Continues
Risk assets are well supported today with equities surging higher around the globe as positive expectations for a US/China trade deal are complimented by a backdrop of broad central bank easing across the G10 space. SPX500 trades 3090.43 last, continuing to push ahead into new record highs as of writing.
JPY & Gold Lower
Safe havens have been hit today given the strong risk-on tone to trading. Both JPY and gold have moved lower against USD as equities continue to strive higher. USDJPY trades 109.05 last as price moves back towards recent highs. XAUUSD trades 1485.74 last, with price sitting on the week’s lows for now, though looking vulnerable to a move lower.
Crude Climbs Despite Bearish EIA Report
Oil prices have been higher today despite the EIA yesterday reporting a massive surge in US crude stores. US inventories were seen higher by 7.9 million barrels last week, more than five times the market estimate. However, with refined products continuing to see a drawdown, the report was not totally bearish. A backdrop of better optimism over a potential US/China trade deal is keeping crude well bid. Crude trade 57.14 last, capped by 57.78 for now.
USDCAD has had a muted session so far and is still sitting at the bottom yesterday’s range following a heavy USD sell-off. With oil prices remaining buoyant, CAD is looking better in the near term though tomorrow’s unemployment data will be the main determinant of whether CAD heads next. USDCAD trades 1.3163 last.
AUD Holds onto Gains
AUDUSD has been higher again today, extending yesterday’s gains on the back of a weak USD. The RBA kept rates unchanged this week and the more optimistic tone to the meeting statement has helped AUD stay supported across the week. Traders now wait on the update RBA Statement on Monetary Policy (SoMP) due over tonight’s Asian session. AUDUSD trades .6905 last.