EUR/USD
With volumes exceedingly thin in Europe today, the EUR/USD was subjected to a day of particularly rangebound trade with an absence of notable economic commentary or tier 1 data to drive price action. Today did see comments from ECB’s Praet, Noyer and Coene, with the latter going against the grain of recent rhetoric from other speakers by saying the current EUR rate is not too strong. Although, this comment and those of Noyer and Praet whose views were very much in-fitting with the current ECB stance failed to grant the pair with any traction. As such, despite a modest bout of USD weakness that was quickly pared, the pair failed to break below the key 1.3600 handle where there was said to be a large sized option expiry, with the 21 DMA seen at 1.3605 acting as support. In the latter stages of the session, the pair did see an uptick to break above earlier session highs, with EUR gaining strength following short-covering in EUR/GBP and EUR/AUD alongside the move higher in EUR/JPY stemming from stops being tripped above 138.50. Looking ahead, attention turns to comments from ECB’s Draghi after-market at 1930BST/1330CDT who will be speaking in London, with tomorrow’s ECB monthly report due to be published tomorrow.
GBP/USD
As was the case for the Eurozone, newsflow from the UK was particularly light with a lack of tier 1 data or influential economic commentary to drive price action. The pair trended lower in the first half of trade amid broad-based USD strength, with the move receding in the latter part of the session as the pair traded in a relatively rangebound manner. One interesting source of focus today from the UK was comments from newly appointed BoE deputy governor Shafik at her UK Commons Treasury Committee, with participants looking for any clues into her stance. The central banker said BoE's next estimates of slack may be lower and rates can stay lower for longer if UK productivity improves, although this did little to impact the pair. Looking ahead, attention now turns to tomorrow’s BoE rate decision, although it largely expected to be a non-event.
USD/JPY
Overnight in Asia-Pacific trade, the pair saw a modest spell of USD weakness which saw the pair dip below 101.50 before moving back above the level as the dollar strengthened against its major counterparts. Newsflow for Japan was particularly light for the session with speculation the BoJ may slightly cut economic forecasts for current the fiscal year ending in March 2015 although this to provide the pair with any direction. Looking ahead, attention now turns to Japanese PPI, with the Y/Y figure expected to show an increase of 0.1 percentage points from May to 4.50%. Although, as always given the importance of interest differential flows for the pair, focus will also be placed on the upcoming FOMC minutes, although the release is expected to show no major surprises.