Good morning,
The week starts in the wake of the G7 summit with a calmer more risk-off sentiment circling the USD. Trump’s comments around the prospect of a new deal with Iran, as well as developments with the US and EU being “very close to doing a deal” are positive in isolation, however, with the US/China dispute still going strong, the market unease will remain prevalent. The USDJPY is proving a strong indicator of the US/China status, with some movement away from the yen following positive trade developments at the weekend, however, today sees us moving back 0.4%.
On the Brexit front, as the deadline draws nearer things are sitting a little more positively and discussions are on the more amicable side. The backstop remains the key hurdle of negotiation and the pound will be at the mercy of any swings of bias here. GBPEUR opens with a 0.25% move up, whilst GBPUSD jumps 0.3%.
The euro has opened this morning resilient in the face of German GDP data. With no expected swings outside of the zero growth year on year, markets have breathed a sigh of relief as concerns that trade disputes and economic slowdowns may have damaged the figures alleviate.
EURUSD starts the day above 1.11 – likely on a strong Macron-led weekend and an Italian coalition deal appearing possible.
Have a great week ahead.