The US dollar returned some of its recent gains to the higher-yielding currencies when risk appetite improved. Data from the US came in mixed, with the new home sales report showing a rise from 531K to 619K and the Richmond manufacturing index falling from 14 to -1, indicating industry contraction. Only the flash services PMI is due from the US today and a climb from 52.8 to 53.1 is expected.


The euro tumbled against most of its counterparts when the German ZEW economic sentiment index slipped from 11.2 to 6.4 instead of improving to 12.1. The region’s index fell from 21.5 to 16.8 instead of rising to 23.4. The German Ifo business climate index is due today and a rise from 106.6 to 106.9 is eyed, although another downbeat results could spur more euro losses.


The pound resumed its climb in recent trading sessions, as anti-Brexit remarks might convince more voters to favor staying in the EU. Opinion polls are still showing a tight race between the “stay” and “leave” votes but BOE Governor Carney did emphasize the repercussions of a Brexit during the BOE Inflation Report hearings. There are no major reports lined up from the UK today.


The franc gave up ground to most of its rivals when risk appetite returned to the markets. There were no reports out of Switzerland then so the franc was also weighed down by weak euro zone data. The Swiss UBS consumption indicator and ZEW economic expectations index are due today, with improvements likely to help the franc regain ground.


The yen was off to a strong start in the earlier sessions but soon gave up its lead when risk appetite improved. There were no reports out of the Japanese economy then but rumors of central bank intervention and a delay in the sales tax hike weighed on the currency. There are still no reports due from Japan today, keeping market sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls got pummeled in earlier sessions but soon recovered against the lower-yielding currencies. RBA Governor Stevens stressed their focus on inflation-targeting, hinting that more rate cuts could be possible. Meanwhile, the API reported a drop in crude oil inventories, driving the commodity price higher. New Zealand’s trade surplus was wider than expected at 292M NZD as exports rose. The BOC decision is up next and no change from the 0.50% benchmark rate is eyed.

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