A mixed session among the USD rates, but the greenback is net higher on the day as USD/JPY maintains a tight range close to 104.00 while EUR/USD tests the lows again amid varying reports on how the ECB may play out. The consensus is that no policy changes will be announced this time around, but given the source reports on QE tapering, reaffirmation that this is not the case/and or a case for QE extension could see the lead spot rate making a fresh probe lower towards 1.0950.
Monday’s lows have been challenged, but are holding as yet. A large chunk of the pressure though has been coming through the EUR/GBP rate, where many have expressed their bearish view on the UK, but which now looks to have run its course, in this leg at the very least. Comments from the UK attorney general that Brexit negotiations are very likely to require parliamentary approval were somewhat qualified by the potential for an agreement before this is in place.
Nevertheless, it has been a near one way move in the pound, with a correction of sorts in the making over the past week or so. Cable is now knocking on the door of resistance in the 1.2325-30 area, while EUR/GBP works through bids from .8950, though the modest beat in UK CPI saw limited impact. Less so the inflation stats in the US, which missed in the core, but this had material influence at the time. USD/JPY is undeterred in its intent on testing 105.00 higher up, but with equities stable, dip buyers are allowing for very little movement on the downside.
USD/CAD has seen a little more freedom of movement, as the support from 1.3050 has generated a recovery through 1.3100. WTI is back under $50.0, but the correlation is sporadic here at present. AUD struggles ahead of .7700 despite a more relaxed tone in the RBA (minutes) on currency levels, while NZD/USD continues to push for .7200+ despite the GDT auctions showing a modest rise in WMP (+2.9%) after futures suggested a 7% recovery
.