The euro is trading at 1.1401 at this writing. The low has traded at 1.1390 while the high has traded at 1.1465. The euro is holding on to gains made yesterday. The euro has been the beneficiary of recent dovish comments from Federal Reserve Chair Janet Yellen who mentioned that the Fed will take a cautious approach to further interest rate hikes in the US as a result of uncertainty over the global economy. This meant that the likely next rate hike would be pushed back to some point later this year. Earlier today, the German Final CPI and the German WPI both met expectations registering 0.8% and 0.3% respectively. Following the release of this data, the euro rallied to touch the high of the day before easing back to current levels. The dollar remains susceptible to downside risk following the comments of the Fed Chair as the chances for a near term rate hike have been pushed back further. However, much depends on how positive the European data coming out actually is perceived to be. European data releases will be a bit sporadic this week. Consequently, market influences may be made from outside of the region.
The British pound is trading at 1.4271 at the moment. Sterling has traded at a low of 1.4226 during the Asian session. The high has traded at 1.4348. UK inflation data was released earlier this morning. Both UK CPI and UK Core CPI were better than expected registering 0.5% and 1.5% respectively. UK RPI was also better than expected with 1.6% recorded. UK PPI Input was lower than expected with 2.0% listed while UK PPI Output was 0.3% meeting expectations. Lastly, UK HPI was lower than expected with 7.6% reported. Cable received a small boost once the data was released encouraging a rally to the high of the day before easing back to current levels. Investors will be wondering how the data out today will influence the Monetary Policy Committee in its coming Policy Statement due out on Thursday. From this most recent inflation data, it is clear that UK inflation remains at least a percentage point lower than the Bank of England’s 2.0% target. There remains the possibility that the central bank will have to incorporate new stimulus measures to reach their targets.
The Japanese yen is trading at 108.35 at present. USD/JPY has traded at a low of 107.87 while the high has traded at 108.42. The dollar seems to have found a bit of support following comments out of japan that the central bank may be looking at slowing the appreciation of the Yen. The recent show of yen strength followed the dovish comments made last week by Fed Chair Janet Yellen which encouraged the yen to a 17-month high. In Japanese data released today. Japanese Bank Lending was slightly lower than the previous month with 2.0% recorded. Japanese Preliminary Machine Tool Orders were an improvement on the previous month with -21.2% listed. The dollar will be looking to remain a bit firmer with the BOJ currently monitoring rates.
AUD/USD is trading at 0.7665 with the low trading at 0.7583 while the high has traded at 0.7672.
USD/CAD is trading at 1.2868 with the low trading at 1.2851 and the high trading at 1.2920.
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