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US-Mexico Trade Fears Dissipate but US-China Trade Fears Persist

Pound News: Rising Wages Keep Pound off Lows

The Pound tumbled against most major currencies at the beginning of the week in reaction to a surprising contraction in the latest monthly UK growth data, but yesterday’s job market report helped the UK currency to hold away from its worst levels.

While some analysts expressed concerns that there were signs of the job market slowing, Pound investors were relieved by the better-than-expected employment change and wage growth figures.

No more notable UK data is due for publication for the remainder of the week, leaving Pound investors to react to developments in the ongoing UK leadership contest as well as movement in rivals.

 

Euro News: Strength in Rivals and Weaker Eurozone Confidence Keeps EUR under Pressure

There has been little directly driving the Euro so far this week. As investors have digested last week’s European Central Bank (ECB) policy statement and the US Dollar has been strengthening again, the Euro has lacked support.

Due to the negative correlation between the US Dollar and Euro, the shared currency has been struggling to hold its ground. Some disappointing Eurozone confidence data from Sentix also weighed on the Euro yesterday.

The Euro is more likely to be influenced by domestic news in the second half of the week. ECB President Mario Draghi will be holding two speeches today, and if he takes any notable shifts in tone on Eurozone monetary policy the Euro will be influenced.

 

US Dollar News: Rising Federal Reserve Interest Rate Cut Expectations Keep Pressure on USD

While the US Dollar’s rebound this week has been part of the Euro’s weakness, the US currency’s potential for gains is fairly limited itself.

At the beginning of the week, investors bought the US Dollar on optimism for North American trade relations to improve, but with Federal Reserve interest rate cut expectations still rising the US currency’s recovery has been limited.

US Dollar investors are now awaiting today’s key US inflation data which could influence Fed interest rate cut bets, as well as the G20 meeting at the end of the month.

 

Canadian Dollar News: CAD Pulls Back from Highs but Remains Strong

Yesterday, the Canadian Dollar’s recent strong streak paused, allowing GBP/CAD to recover slightly from its worst 2019 levels so far. However, while CAD fell from its best levels, the outlook for the currency was still positive overall.

The Canadian Dollar is benefitting from recent strength in Canadian data. This week, Canadian Dollar investors are also bullish about hopes of improving trade relations between the US and Mexico.

This week’s more influential Canadian data will be published on Thursday and Friday, leaving Canadian Dollar investors to react to trade developments and the strength in rivals today.

 

Australian Dollar News: US-China Trade Jitters Persist and Keep AUD under Pressure

US-Mexico trade tensions have gone away for now, but the ongoing issue of the US-China trade war continues. As China is Australia’s biggest trade partner, the Australian Dollar has remained unappealing rather than benefitting from US-Mexico trade optimism.

As well as US-China trade jitters ahead of the G20 summit at the end of the month, Australian Dollar investors are anticipating upcoming job market data before moving too much on the currency.

May’s Australian job market report is due tomorrow, so the ‘Aussie’ may not move much in reaction to this morning’s Westpac consumer confidence data either.

 

Upcoming Data

 

Wednesday, 12th June

01:30    Australian Westpac Consumer Confidence

09:15    ECB President Draghi Speech

13:15    ECB President Draghi Speech

13:30    US Inflation Rate

 

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To keep up to date with the Euro, visit the Euro blog in our Currency News section.

 

Jack Wiles

Affiliate Account Manager

JSW@fcgworld.co.uk

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