British Pound Slumps, US Dollar Looks to Fed for a Lifeline
- British Pound drops before PM May meeting, EU FinMin meeting
- Yen down as Asian stocks rise, NZ Dollar higher with local yields
- US Dollar may rise as Fed officials look through political turmoil
The British Pound fell in Asian trade. UK Prime Minister Theresa May is due to be interviewed by the BBC ahead of a general election on June 8 while a meeting of EU finance ministers is set to take place. Taken together, this amounts to fertile ground for Brexit-related volatility, particularly after several weeks of tense rhetoric from both sides of the English Channel.
The Yen likewise moved lower as Asian stock exchanges traded higher, following a positive lead from Friday’s Wall Street session. That put pressure on the perennially anti-risk Japanese unit. The New Zealand Dollar traded higher alongside local bond yields, hinting at a supportive shift in the RBNZ outlook as move’s catalyst. A discrete trigger was not readily apparent however.
Fed-speak is in focus ahead. Comments from Governor Lael Brainard as well as Philadelphia and Minneapolis branch presidents Patrick Harker and Neel Kashkari are on tap. An upbeat tone suggesting officials are looking through recent US political jitters and intend to press on with a program of interest rate hikes may offer a boost to the US Dollar.
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** All times listed in GMT. See the full DailyFX economic calendar here.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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