- USD: Market participants look for hints
- EUR: Talks begin in Athens
- GBP: Figures in line with expectations
- CAD: Canadian dollar slips on oil
After yesterday’s strong Durable goods figures (3.4% VS 3%), the dollar has continued its rally against main currencies and looks to move even further on tomorrow’s Fed speech. On today’s agenda, markets expect Markit Service PMI data to come in stronger than last month’s numbers. Positive figures, such as the ones seen in yesterday’s report, would add more arguments for the Fed to increase interest rates from record lows. The focal point for this session and tomorrow will be the Fed’s monetary policy statement.
Investors are not expecting any major decisions this week, but they will be looking for hints in the Fed’s language regarding possible future movements. EURUSD is trading lower on anticipation to Fed speech, which leaves Greece bailout talks on the back burner for the time being.
As agreements between Greece and its international creditors on third bailout terms begin this morning, a new deadline creeps up. Greece needs to come up with money to pay for ECB-held bonds that mature mid-August. This puts pressure on negotiations and will likely increase volatility in the euro as the deadline moves closer. Data wise, Europe will stay quiet until Friday when they release inflation figures. The Fed’s speech is likely to be the main volatility driver so expect to see movements in price in anticipation of the speech.
Sterling continues trading at yesterday’s levels. Primary GDP figures came in line with expectations and added little fuel to currency moves. With the Greek drama on hold, the UK focuses on interest rate hike possibilities and keeps a close eye on the conditions in the US. The economic calendar looks rather light so movements will also be broad-based. The Fed’s speech is likely to influence GBPUSD trading levels in anticipation and at release.
The Canadian dollar continues on its unstable path, trading above 1.30 against the USD (highest since 2004). Oil continues its fall to prices not seen in 4 months, hurting a significant sector of Canada’s economy. Chinese slowdown and increased American shale-oil production have added to this drop in price, and will keep the Canadian economy in the red for another few months. USDCAD is also likely to move higher after Fed speech, since there are no other economic figures due to be released.
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