Euro May Look Past ZEW Data as Pound Continues to Correct Lower
- Euro unlikely to find lasting lead in German ZEW survey outcome
- British Pound may retrace more of its recent gains as Kohn speaks
- Canadian Dollar down as BOC’s Lane steps up jawboning effort
The German ZEW survey of investor sentiment headlines an otherwise quiet European economic data docket. A mixed picture is expected, with confidence in current conditions ebbing a bit in September while the forward-looking assessment brightens for the first time in four months. The result may pass without a strong Euro response considering its limited implications for near-term ECB policy.
BOE Financial Policy Committee member Donald Kohn is also scheduled to speak. The remarks will be focused on supervisory policy implementation and so are unlikely to address the economic outlook or monetary policy directly. However, Kohn may cite a recent tightening of UK financial conditions with some concern, implying a constraint on future rate hikes. That may weigh a bit on the British Pound.
The Canadian Dollar fell in otherwise quiet Asia Pacific session across the G10 FX space. The move follows comments from BOC Deputy Governor Tim Lane, who said policymakers are “paying close attention” to the impact of a stronger currency and will take its level “strongly” into account when setting policy. That seemed to undermine tightening prospects after recent hikes drove explosive Loonie gains.
The US Dollar edged a bit lower, seemingly correcting after yesterday’s similarly tepid advance. Indeed, price action remained contained well within the boundaries prevailing over the preceding 48 hours. The greenback may struggle to find lasting momentum in the near term as traders withhold direction conviction ahead of Wednesday’s much-anticipated FOMC monetary policy announcement.
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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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