With little new data out, the pound is falling after top Brexit negotiator and Czech State Secretary for EU Affairs Tomas Prouza said in an email last night that Britain would not be able to get a majority of the 27 EU member votes it needs to officially exit the EU without agreeing to the group’s stipulations, especially regarding immigration.
The euro is mostly unchanged this morning even as Germany’s producer inflation shrank a bit more than anticipated in August. Greece’s current account (related to trade balances) came in line with expectations.
The US dollar is slightly up against major currencies this morning as investors await tomorrow’s Federal Reserve meeting. Futures markets are pricing in less than a 20% chance of an interest rate hike for the meeting, so a surprise rate increase tomorrow could give the dollar a significant boost.
Elsewhere, the Canadian dollar is dipping as oil prices fall below $43 per barrel. The Australian dollar is rising as investors are more optimistic that the Reserve Bank of Australia’s inflation targets will be met. The Aussie dollar is also getting a boost with China’s housing prices increasing by 9.2% compared to 7.9% from the previous period (China is Austrlaia’s largest trading partner).
EURUSD: The euro is mostly flat despite Germany’s producer inflation shrinking more than anticipated.
GBPUSD: The pound is falling as the EU referendum process gets more complicated.
AUDUSD: The Aussie dollar is up as inflation grows on target and as China housing prices rise.
USDCAD: The Canadian dollar is dipping as oil prices fall below $43 per barrel.