The Japanese yen, Euro and Swiss Franc remain the weakest currency this week so far. Euro continues to feel the pressure from expectation that ECB would ease further policy in June and fresh selling was seen yesterday. That was triggered by reports that Bundesbank, the most hawkish member of ECB, is willing to support further easing and that could have cleared an important hurdle for ECB president Draghi. Markets seem to be pricing in a done deal and the question is now on what "package" of stimulus measures would be adopted. That could include negative rates or even quantitative easing. ECB officials comments would be scrutinize heavily, in particular, German Bundesbank Weidmann will speak later today.
Meanwhile, the Japanese yen struggles in recent range against other major currencies as strong risk appetite limited its gain. Dow closed at new record high at 16715.44 overnight while S&P 500 also closed at record high at 1897.45. Positive sentiments carried on in Asian session in general. And, despite data miss from New Zealand, Kiwi and Aussie are the strongest currencies this week so far. The overall development makes NZD/JPY, NZD/CHF and EUR/NZD among the biggest movers this week.
Sterling is also firm, thanks to weakness in EUR/GBP, except against Aussie and Kiwi. The Pound is holding above 1.6819 minor support against dollar as the markets are waiting for the key events today. BoE will release the quarterly inflation report. Markets are pricing in a rate hike from BoE in the first quarter of next year and will be looking for clues to affirm this speculation. Also UK will release employment data, which is expected to dropped to 6.8% in March.
On the data front, New Zealand retail sales rose 0.7% qoq in Q1 versus expectation of 0.9% qoq. Japan domestic CGPI rose 4.1% yoy in April. German CPI, UK employment, Swiss ZEW and Eurozone industrial production will be released in European session. US will release PPI.