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  • richard evans

Can EUR gain amid push back on rate cut timings

Good morning

 

Well I thought yesterday would be a quiet day in the currency markets but I didn’t expect it to be quite so quiet.  GBPUSD did try to push towards 1.2700 but failed to break up and slipped back to 1.2680 or so, just a few pips from current levels.  EUR gained a little ground, and I mean little, as a mildly hawkish Lagarde reaffirmed ECBs commitment to get inflation lower which could limit the chances of an early rate cut, while ECBs Stournaras said he sees no ECB rate cut until June.  EURUSD now 1.0855, GBPEUR 1.1690.

 

USDJPY slipped back a little overnight, trading from a high around 150.80 to current levels of 150.35 as their inflation numbers came in a touch higher than expected, even though they showed a slowing from last month.  A move away from negative rates to zero could be seen as early as April, but the feeling is that even if this were to happen it would likely be the only BoJ rate rise in 2024.

 

There is still some hope of a ceasefire in Gaza, with Biden suggesting a deal could be reached by Monday, although there is still a significant gap between the demands of the two sides.   Meanwhile Biden is also hoping for his own government to find an agreement to ward off yet another potential government shutdown later this week.  He’ll be meeting congressional leaders later today.

 

US durable goods and consumer confidence are released this afternoon but the chances are we’ll see another quiet session.  Overnight could get more interesting with Aussie inflation numbers, followed by RBNZ rate announcement.  They are widely expected to keep rates unchanged, although worth remembering that earlier this month ANZ called for a 25bps in both February and April, so there could be a hawkish tilt to the meeting.  NZD has actually been sold off a little ahead of the meeting, I am aware of people looking to get long NZD were we to see a post-RBNZ dip.  For the record, NZDUSD, AUDNZD and GBPZND are 0.6170, 1.0615 and 2.0560 respectively. 

 

I’m having trouble finding any other exciting news, but I have to say I am quite intrigued about a new TV program that aired last night called The Jury.  I didn’t actually watch it, I’ve recorded it, but it is a re-enactment of a real murder trial with actors playing the key roles.  The jurors know it is a fake trial but the aim is to see if they will come to the same verdict.  The twist?  Unbeknown to the jury, there is a second jury watching exactly the same thing, having their own discussions and making their own verdict.  Will they reach the same verdict?  And what are the implications for the judicial system if they don’t?  This has the potential to be quite gripping.  I hope it lives up to the hype.

 

That’s all for today, I guess we’ll have to sit and wait to see if GBPUSD can break above 1.2700 and whether EUR can extend its small gains against both USD and GBP. 

 

-  13.30 US durable goods orders

-  13.40 BoEs Ramsden speaks

-  14.00 US house price index

-  14.05 Feds Barr speaks

-  15.00 US consumer confidence

-  00.30 AUS monthly CPI

-  01.00 RBNZ rate announcement

-  02.00 RBNZ press conference

 

 

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