Another ramp up in GBP, taking out 1.4660/65 in cable and .7600 against the EUR. CAD fighting back as BoC less dovish on wildfires impact.
The usual suspects have been providing the volatility in FX today, led early on by a sudden ramp up in GBP despite a move balanced voting skew in the latest YouGov poll showing 41% each side. Survation later in the day restored the recent theme of gains for the Bremain camp, but a more undecided component was included. A steady recovery in EUR/GBP was quickly turned on its head as the cross rate took out .7600, pushing cable off the low 1.4600’s and back to and through the recent 1.4662 highs. 1.4700 has since been breached, but plenty of sellers lying in wait ahead of the early May peak at 1.4770. CAD was where the rest of the action was, as player were met with the expected no change call at the BoC. The accompanying statement highlighted the impact of the Alberta fires on Q2 growth, but anticipated a rebound in Q3. This saw USD/CAD taking out support ahead of 1.3070, but losses through here were met with fresh demand as the market continues to look to a more hawkish speech by Fed chair Yellen’s on Friday. This saw EUR/USD making a fresh low just under 1.1130, but losses slow here. USD/JPY is still grinding higher with stocks and the Fed perspective. Late in the day, the DoE draw (and lower output) was not as large as the API reported Tuesday evening.