The euro, after its climb Monday morning, has wiped out its gains today and is trading flatter compared to the dollar as the markets hold the greenback ahead of US key indicators coming out today. It is expected that inflation will rise from its April levels, which will give more strength to the dollar and impetus to a continuing greenback rally. The euro also received little boost from upbeat Eurozone trade balance figures this morning, which came in at 22.3 billion euros, higher than forecast.
The pound recovered against the dollar early this morning following a poll that showed 55% were in favor of remaining in the EU, an increase from 52% in April. The sterling’s sharp gains of 0.9% were pared by the release of the UK inflation report. Despite disappointing CPI data which quickly followed, the pound is maintaining some recovery, sitting at 1.449 and close to its resistance level of 1.4524. But as the US gears up for a host of economic data, particularly CPI which has come out as expected, we may see this picture change, and the pound’s recovery probably looks slim.
The Australian dollar is seeing some much needed positive news this morning. The Reserve Bank of Australia released its meeting minutes, which warn that there may still be need to ease monetary policy, but that a “follow-up rate cut next month is unlikely.” The Aussie dollar quickly climbed 0.5% on the news, its biggest gain in a week. Its resilience yesterday despite the disappointing data from China is raising hopes that the upside momentum could be maintained.
EURUSD: Euro’s gains slim after it fails to capitalize on positive trade balance data.
GBPUSD: Pound stronger after Brexit poll leaning toward a “remain” vote.
AUDUSD: Aussie dollar up after RBA quashes fears of an immediate rate cut.
USDCAD: Loonie weaker as the dollar rally continues.