USD

The US dollar held its ground against its peers even as talks of balance sheet unwinding in September dampened rate hike hopes for the same month.

According to Harker and Evans, this move is separate from their economic assessment but they could rethink if data keeps coming in weak. US existing home sales turned out stronger than expected and the HPI is due next, along with the CB leading index. 

EUR

The euro was off to a rough start but managed to recover against its peers as sentiment improved in the region. There were no reports out of the euro zone in the recent session and none are due today so risk appetite could determine where the shared currency could head next. 

GBP

The pound drew a bit of support from relatively upbeat remarks from BOE member Haldane. This tempered cautious remarks from BOE head Carney in the previous session while the Queen’s Speech also injected a bit more confidence in the government and economy. UK public sector borrowing data also turned out better than expected. The CBI industrial order expectations index is due next and a fall from 9 to 7 is eyed. 

CHF

The franc managed to rake in some gains, mostly against the commodity currencies. There were no major reports out of the Swiss economy so currency-specific factors stayed in play. The trade balance is due next and a wider surplus of 2.44B CHF compared to the earlier 1.97B CHF is expected. 

JPY

The yen also gained ground against the higher-yielding comdolls as risk aversion came into play. Japan’s all industries activity index posted a 2.1% gain, higher than the projected 1.7% rebound. There are no major reports due from Japan next so market sentiment could stay in play. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the weakest performers for the day as the drop in crude oil finally took its toll on the Loonie. Even though US stockpiles posted a larger than expected draw of 2.5 million barrels, the commodity barely came off its lows on concerns of rising output from Libya. The RBNZ decision and Canadian retail sales reports are lined up next. 

By Kate Curtis from Trader’s Way