As global markets come to terms with the shock of Brexit, the pound has erased some earlier losses and demand for the Japanese yen is easing. UK monetary data showed a rise in mortgage approvals and consumer credit which helped fuel the up, but taken in the context of sharp losses following the referendum results last Friday, the gains may be a minor blip. Could selling pressure for the pound return? In a Bloomberg survey of economists, 71% of respondents see Britain falling into a recession for the first time since 2009.

US Federal Reserve Governor Jerome Powell warned yesterday that Britain’s decision to leave the European Union has shifted global risks further to the downside. Pricing in market derivatives show that the next interest rate hike will not come until January 2018. As a result, the US dollar is seeing slight losses this morning, even after Q1 GDP released yesterday came in better than expected. While the data showed that US economic growth did slow in Q1, the slowdown was not as steep as originally forecast.

Global stock markets continue to move up for a second day. The global MSCI index peaked toward the highest level pre-Brexit.

EURUSD: Euro sees slight gains against the greenback as Brexit anxiety calms.

GBPUSD: Sterling strengthens on positive economic data.

AUDUSD: Aussie dollar gains along with global risk-on sentiment.

USDCAD: Canadian loonie benefits from weaker US dollar.