FX Update – June 26 – Consolidations abound


Narrow ranges with a modicum of yen firmness have been prevailing against a backdrop of higher equity markets in Europe and Asia, which have tracked Wall Street gains, though US equity index futures have shown little directional impulse. China markets were closed for a second day, and will reopen on Monday. Concerns about a new wave of coronavirus cases as economies reopen (the US yesterday reported a fresh high in daily confirmed new cases, and Australia today reported a new two-month high in new cases, for instance) continue to vie with massive stimulus and improving economic data.

In currencies, EURUSD has plied a narrow range in the mid-to-low 1.1200s so far today, holding above yesterday’s four-day low at 1.1190. USDJPY dipped to a two-day low at 106.86, while EURJPY edged out a four-day low. AUDJPY also dipped, though remained above its Thursday nadir. Cable, after tumbling from the mid 1.2500s over the last couple of days, which culminated in a four-day low at 1.2388 yesterday, steadied in the lower 1.2400s. AUDUSD managed to surpass yesterday’s high by 2 pips in making a peak at 0.6896 before retreating. USDCAD has settled to a consolidation of recent gains, holding in the low-to-mid 1.3600s, below yesterday’s 11-day high at 1.3671.

USOil has edged out a two-day high at $39.34. The key commodity remains down by just over 2% from week-ago levels. Whilst the Gold price slipped below $1760 earlier, it holds at the daily pivot point around $1762, some $20 a troy ounce (1.1%) higher than a week ago.

In data, Japanese inflation indications reaffirmed, to little surprise, a picture of benign price pressures, well below the BoJ’s target. BoJ Governor Kuroda warned of a slow recovery ahead, affirming the market view that the central bank is set to chop growth projections at its policy review on July 14th-15th. ECB chief Lagarde warned of a “restrained” recovery in the Eurozone.

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Stuart Cowell

Head Market Analyst

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