Daily FX Wrap: GBP sees a calmer session as Parliament gives yesterday’s announcement the green light while ECB speakers prep up for next week.
GBP was once again in focus in the early stages of EU trade with GBP/USD having given up the 1.2900 handle seen during yesterday’s frantic surge in US hours after having met resistance at 1.2920. That said, today saw a more contained session for the pair with GBP/USD ranging from 1.2809-1.2860 with today’s session seeing confirmation (as expected) that UK Parliament has given the green-light for yesterday’s announcement by PM May to call a snap election. Elsewhere, EUR lost some modest ground against the USD with prices unfazed by the latest (in-line) EZ inflation data and instead focusing on recent rhetoric from ECB’s Coeure and Hansson who suggested that the ECB are willing to discuss the future path of ECB policy but it is currently too early to make any concrete decisions. This could be a key theme in the coming days ahead of next week’s ECB meeting with bank heads seemingly looking to prep the market ahead of the event.
Elsewhere, commodity currencies were a touch softer throughout the session with USD/CAD tripping above 1.34, while there has been no respite for the AUD as we are back testing 0.7500 against the USD, but the flow looks to be going through AUD/NZD, which is now just below the 1.0700 mark.
From a geopolitical perspective, headlines have slowed down from the recent media frenzy and as such the USD managed to regain some further ground against JPY. That said, market participants will no doubt be looking ahead to next week’s North Korean Military Day in case of further provocations from the North Korean premier. In terms of other things to look out for, data is relatively light for tomorrow’s session with traders ultimately beginning to prep for Sunday’s French Presidential election.
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