MARKET DEVELOPMENT –EURUSD Dipson Dovish Draghi, GBP Eyes Brexit Summit, AUD Buoyed
EUR: The Euro dipped to session lows as Draghi reiterated his dovish stance. The ECB President continued to state growth risks remain tilted to the downside, while also highlighting that headline inflation could dip in the coming months. Little in the way of fresh dovish signals as Draghi stated that the details of TLTROs and a tiered deposit rate had not been discussed at today’s meeting. In light of the drop in the Euro, the US Dollar consequently reclaimed the 97.00. US inflation provided a mixed signal with headline inflation rising above forecasts (largely energy driven), while core inflation slipped below analyst expectations. Eyes now on the FOMC minutes.
GBP: The Pound failed to maintain a foothold above the 1.31 handle, despite this morning’s encouraging data out of the UK inflation GDP growth surprised to the upside. However, with focus on today’s EU summit, in which the UK are looking for a Brexit extension, UK politics will continue to dictate the Pound. Of note, GBP O/n vols imply a move of 96pips (Full report here).
AUD: The Australian Dollar had been buoyed by positive commentary from RBA’s Debelle in which the rate setter highlighted that the labour had been surprisingly strong, thus disappointing many looking for dovish signals. Alongside this, data out of Australia continued to improve with consumer confidence picking up after last month’s dismal reading.
Source: Thomson Reuters, DailyFX
DailyFX Economic Calendar: – North American Releases
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WHAT’S DRIVING MARKETS TODAY
- “EURUSD Price Outlook: Primed for ECB, FOMC & Brexit Triple-Header” by Nick Cawley, Market Analyst
- “EURUSD Price Edging Higher, ECB Leaves Monetary Settings Unchanged” by Martin Essex, MSTA , Analyst and Editor
- “Currency Volatility: GBPUSD Volatility Surges Amid Emergency EU Summit” by Justin McQueen, Market Analyst
- “Crude Oil at Big Spot on Chart; Technical Outlook for Gold Price, Dow & More” by Paul Robinson, Market Analyst
- “Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
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