The Greenback was under pressure due to internal chaos in the White House and brewing tensions with North Korea. According to two intelligence officials, the latest successful ICBM test signals that the hermit nation could hit most of the US. Data was mixed, with the Chicago PMI posting a larger than expected drop to 58.9 and pending home sales showing a 1.5% rebound. Personal spending and income, along with the core PCE price index, are lined up next.


The euro continued to advance against most of its peers when the core CPI flash estimate printed stronger than expected results. The headline reading was unchanged at 1.3% as expected but the core version rose from 1.1% to 1.2%. German retail sales also beat expectations with a 1.1% jump versus the 0.1% estimate. Final manufacturing PMIs from its top economies and the euro zone’s flash GDP reading are due today.


The pound is holding steady leading up to the release of June PMI readings and the BOE decision. Data turned out stronger than expected yesterday as net lending to individuals rose to 5.6 billion GBP while mortgage approvals held steady at 65K. Nationwide HPI is due today, along with the manufacturing PMI which could recover from 54.3 to 54.4.


The franc kept tumbling against its peers as pairs have been breaking technical levels and drawing more sellers in. There were no reports out of the Swiss economy yesterday but the monetary policy divergence with the ECB is probably keeping franc bears in the game. Swiss banks are closed for the holiday today.


The Japanese yen had a mixed run as it mostly reacted to currency-specific events. The safe-haven currency appears to be regaining its lost ground to the dollar as the latter faces falling bond yields on the chaos in Washington. The final manufacturing PMI was downgraded slightly from 52.2 to 52.1.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was unable to hold on to its gains even though crude oil ticked higher. Underlying inflation data from Canada printed downbeat results, dashing hopes of another BOC hike in the near future. RMPI fell 3.7% versus the projected 3.2% fall while the IPPI slipped by 1.0%. The RBA decision is due next and no changes to the 1.50% benchmark rate is eyed as the central bank might issue a neutral statement.

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