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Thursday started off bullish for the Pound, with UK Retail Sales printing better than expected, with the m/m Retail Sales for May coming in at 1.3% versus the expected 0.5%. But the bull run sputtered out quickly, after the European Central Bank pushed out hopes of any rates hikes until after the summer of 2019.

Aside from the central banks, trade worries continued to be on investors’ minds on Thursday. President Donald Trump’s administration is preparing to announce tariffs on tens of billions of dollars in Chinese goods as early as Friday, a move that is feared to trigger retaliatory action by China. Trade concerns can be supportive for haven gold, although its direct impact has been limited so far.

The Sterling is trading on the right foot for yet another session, lifting GBP/USD to test the area of fresh 5-day tops in the vicinity of 1.3450.Cable is advancing for the second session in a row on Thursday, deriving support from the renewed selling bias around the greenback and auspicious results from the UK calendar.

The euro firmed up against the dollar on Thursday, ahead of a policy announcement from the European Central Bank, which may outline the bank’s plans for winding down its bond-buying program.Meanwhile, a popular gauge for the U.S. dollar continued to decline in the wake of an interest-rate hike by the Federal Reserve on Wednesday. The dollar initially climbed after that decision, but then slipped as the upbeat mood faded. The Fed’s key interest rate now sits within a range of 1.75% to 2%, after the seventh hike since December 2015.

Asian stock markets were down in early trading Thursday, after the U.S. Federal Reserve raised interest rates and indicated two more rate hikes were coming later this year.Japanese stocks opened lower, with just the fishery/ag/forestry and marine transportation sectors up.

The market has already priced in a decision by the Fed to raise the target range of the federal funds rate by 25 basis points to a range of 1.75% to 2%. This will be the second rate hike this year and the seventh move since the start of the tightening cycle.

Central banks will be in the spotlight this week, with rate statements from the Federal Reserve on Wednesday and the ECB on Thursday. The Fed is widely expected to raise rates, with odds of a quarter-rate hike at 94%. Although the rate increase has been priced in, the U.S dollar could still make some gains against its major rivals. In Europe, the ECB will be looking for any clues with regard to the ECB’s asset-purchase program.

UK CPI data headlines the economic calendar in European trading hours. The headline inflation rate is expected to print at 2.4 percent on-year in May, unchanged from the prior month. Leading PMI surveys argue for softer price growth however, echoing a string of recent disappointments on UK data outcomes relative to consensus forecasts. Such a result is likely to weigh on the British Pound.

Gold prices retreated as the US Dollar posted the largest increase in two weeks, extending its winning streak to a fourth consecutive day and undercutting the appeal of anti-fiat alternatives. An upshift in the priced-in 2019 interest rate hike path implied in Fed Funds futures looks to have accounted for the move. In-line US CPI data passed largely unnoticed, as expected.

U.K. stocks fell Tuesday after a historic meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un resulted in an agreement that critics said was too broad in nature when it comes to denuclearization in the Korean Peninsula. The pound declined as attention to the Brexit debate among British lawmakers. Meanwhile, British wage-growth figures fell slightly short of expectations. How markets are performing

U.S. President Donald Trump and North Korean leader Kim Jong Un signed a joint document pledging to work toward the complete denuclearization of the Korean Peninsula, but the statement was criticized as lacking detail on the verification of the process. Competition for market attention also fixed on interest-rate policy. The Federal Reserve is expected to raise interest rates after its two-day meeting, which begins Tuesday. European Central Bank policy makers are expected to announce the timing of a reduction of its crisis-era asset-purchase initiative when it meets on Thursday.

The votes in the House of Commons, the elected chamber, could influence negotiations over the future relationship between the European Union and the U.K. after Brexit. The results could also deliver a further blow to Prime Minister Theresa May’s authority, which was severely damaged when she lost her parliamentary majority after calling a general election last year.

Gains for European stocks largely faded Tuesday, with investors considering results of U.S. President Trump’s unprecedented summit with North Korean leader Kim Jong Un in Singapore.The broader Stoxx Europe 600 Index SXXP, +0.07% slipped by less than 1 point to 387.80 after rising as much as 0.4%. The basic materials and oil and gas groups led declining sectors, but the utility and tech groups moved higher. On Monday, the index rose 0.7%, the first rise in five sessions.

AUD/USD retraces the decline from late last week even as the G7 Summit does little to ward off the threat for a global trade war, and the pair may continue to catch a bid over the next 24-hours of trade as the recent pickup in market sentiment appears to be gathering pace.

As for interest-rate policy, the key driver of currency and gold levels, the Federal Reserve is expected to raise interest rates after its two-day meeting that begins Tuesday. European Central Bank policy makers are expected to announce the timing of a reduction of its crisis-era asset-purchase initiative when it meets on Thursday.

The U.S. leader, who is now in Singapore to meet with his North Koreancounterpart, said “Fair Trade is now to be called Fool Trade if it is not Reciprocal,” and called into question the trading relationship between his country and some of its closest allies.

“GBP/USD continues to correct higher near term. The Elliott wavecount is pointing to a corrective rebound into the 1.3500 and then 1.3600 area, which is fairly tepid (this would not even represent a 38.2% retracement, which lies at 1.3652). We have a support line at 1.3354, which...

“An interesting and likely volatile week awaits GBP with risks skewed on the upside for EUR/GBP ahead of the House of Commons vote on the House of Lords’ amendments to the EU withdrawal bill on Tuesday”.“It is also a very busy week in terms of UK ...

The USD/JPY is trading sharply higher in Monday action, lifting to 109.80 as traders resume bidding, undeterred by the weekend's G7 trade spat.The Dollar-Yen pairing is lifting off of last week's swing low to end last Friday as markets step into the new week on decidedly...

Market events to watch this week

The US dollar is lower against major pairs this week as the market prepares for an eventful week. The U.S. Federal Reserve will kick off its June Federal Open Market Committee (FOMC) meeting on Tuesday June 12. The two day meeting is expected to end with the announcement of a 25 basis points rate hike.

Sterling is likely to gain this year and by the time Britain leaves the European Union next March will have recouped a chunk of its losses since the June 2016 decision to leave the bloc, a Reuters poll suggested.

Momentum indicators are bullish and DMI’s are confirming. USDCAD has already breached the descending trend line drawn from the 2016-2017 highs and now risks an extension toward the one year March high around 1.3120. Near-term support is expected at 1.2950.

Exports were steady, rising 12.6% from a year ago, the same as in April, after the revisions. However, imports surged 26% but were expected to have slowed after the 21.5% rise in March. Meanwhile, the US-Chinese trade tensions come to a head next week.

The greenback is extending the up move vs. its Canadian neighbour at the end of the week, pushing USD/CAD further north of the psychological 1.3000 handle.The pair is up for the second consecutive session on Friday, surpassing the key 1.3000 mark on shrinking...

continues to rally but appears to be struggling ahead of the 55 day ma at 130.61 and downtrend at 131.15. Near term we unable to rule out scope for further gains to the 131.34/48 May highs and possibly even for the 133.48 April peak. The market is...

Chief Analyst at Danske Bank Jakob Christensen expects the Sterling to remain under pressure in the next weeks.“GBP had a volatile session yesterday with EUR/GBP bouncing above 0.88 on reports that David Davis threatened to quit due to a disagreement with Prime Minister May on the ‘Irish backstop’....

Sterling climbed to more than two-week highs on Thursday, helped by general dollar weakness thanks to a broadening rally in the euro currency, though concerns over Brexit negotiations capped gains.

The Japanese yen has posted modest gains in the Thursday session. In the North American session, USD/JPY is trading at 109.99, down 0.17% on the day. On the release front, Japanese Leading Indicators improved to 105.6%, matching the forecast.

The pair’s near term outlook remains neutral, with the likelihood of a probable test of the upper end of the 108.50/110.50 range, noted FX Strategists at UOB Group.24-hour view: “Instead of trading sideways (as expected yesterday), USD broke above...

Having failed to clear 100-day SMA barrier, the AUD/USD pair lost some ground and eroded a part of previous session's strong up-move to six-week tops.With investors looking past yesterday's upbeat Aussie GDP growth figures, a weaker-than-expected Australian trade surplus data weighed on the domestic currency...

keeps the march north well and sound on Thursday, advancing to the 1.1800 neighbourhood on the back of renewed anxiety over next week’s ECB meeting. The pair has already gained around 3 cents since last week’s fresh cycle lows in the vicinity of ...

The British pound has posted slight gains on Wednesday, continuing the upward trend which marked the Tuesday session. In North American trade, GBP/USD is trading at 1.3409, up 0.11% on the day. On the release front, there are no major events out of the U.S or Britain. On Thursday, the U.K releases Halifax HPI and the U.S publishes unemployment claims.

Against the euro, the greenback is down 3.2 percent year-over-year, compared with a year-over-year decline of 14 percent in mid April. It hit a 10-month high on Tuesday as investors balked at the prospect of repeat elections in Italy, which may become a de facto referendum on Italian membership of the currency bloc.

The Ivey Purchasing Manager's Index (seasonally adjusted) for May stands at 62.5, indicating that purchases were less than the previous month," the Richard Ivey School of Business said in its latest report. The unadjusted version of the data came in at 69.5 vs. 70.4 in April.

The up move in the pair could extend further and test the 0.7080 region in the near term, according to FX Strategists at UOB Group.24-hour view: “Against our expectation, NZD did not break the major 0.7050 level as it slipped to a low of 0.6997 before rebounding. We continue to see chance for a move above 0.7050 but in view of the weakened momentum, a sustained up-move...

The USD/JPY pair caught some strong bids on Wednesday and was now seen building on its momentum further beyond the key 110.00 psychological mark. After yesterday's good two-way moves, the pair resumed with its prior appreciating move and spiked to 2-week tops in the last hour. The momentum remained unaffected by a weaker tone surrounding the US Dollar, with bulls seemed to track a goodish pickup in the US Treasury bond yields.

The single currency is trading on a positive fashion on Tuesday, with EUR/USD looking to consolidate the recent breakout of the key 1.1700 milestone.The pair gained extra traction late on Tuesday and move above 1.1700 the figure particularly after a story run by news agency Bloomberg said the ECB could discuss the exit of its ‘quantitative easing’ programme at its meeting on June 14.

After losing ground for three consecutive days, gold is up on Tuesday. It is approaching the $1,300 area where the 20-day moving average stands. A daily close above could signal more gains ahead for the metal.

Forms a triple top bearish chart pattern on the 1-hourly chart and retracement back below 50-hour SMA prompted some fresh technical selling in the past hour, which could get extended towards 200-hour SMA support.

After closing the fourth straight day higher, the USD/JPY pair failed to extend its gains on Tuesday and retraced yesterday's upside. As of writing, the pair is trading at 109.70, around 10 pips above its daily low, and is down 0.1% on the day.

Sterling jumped on Tuesday after a survey showed companies in Britain’s dominant services sector grew more quickly than expected in May after a winter slump in early 2018.

The dollar stabilised on Tuesday just below its six-month high of last week, as investors awaited data that might confirm the U.S. economy is on track for a strong June quarter with rising bond yields also supporting the greenback.

Forex today witnessed tight trading ranges amid mixed market sentiment, as chances of a global trade war are on the rise, with Mexico, Canada and Europe retaliating to the US metals’ tariffs imposed last week.

The USD/JPY pair, which was able to close the previous week flat after a decisive recovery in the second half of the week, eased to a daily low of 109.37 during the European morning before reversing its course and advancing into the positive territory in the last hour. As of writing, the pair was trading at 109.70, adding 0.15% on the day. The pair's price action on Monday seems to be dominated by the USD's market valuation...

The GBP/USD pair faced rejection near the 1.3400 handle and quickly retreated around 40-pips from 1-1/2 week tops touched earlier. The pair initially built on last week's recovery move from the 1.3200 neighborhood, or 6-month lows, and was further supported by some renewed US Dollar selling bias, led by escalating trade tensions. The up-move got an additional boost following the release of yet another surprisingly stronger-than-expected UK macro data, this time coming in the form of UK construction PMI.

Last Friday, the USD/CHF pair recorded its fourth straight negative weekly close and failed to make a recovery in the first trading day of the new week. After refreshing its daily low at 0.9830 before American traders hit their desks, the pair erased a portion of its losses in the last hour and was last seen trading at 0.9855, where it was down 0.25% on the day. The pair's slump on Monday seems to be caused by a weaker USD rather than a strong CHF...

The single currency rallied on relief among investors that the new coalition government in Italy does not intend to head back to snap elections or exit the euro. Investors are scrutinising business surveys to try to get a sense of whether the UK economy is picking up in the second quarter after a sluggish start to 2018.

With the Italian issue set to remain a lingering concern as markets await a political programme from the new government formed on Friday, on the back of the recent data stream confirming the strength of the US economy, we still stress the case for USD strength near term, notably against the euro, and emphasise that our EUR/USD forecasts are under review.

Forex today was driven by the risk-friendly market environment, as upbeat global macro data lifted the overall sentiment, with upbeat Australian dataflow adding to Friday’s solid US jobs report.

Market events to watch this week

The US dollar is higher against major pairs on Friday after a strong US jobs report was published. The U.S. non farm payrolls (NFP) report showed the economy added 223,000 jobs last month driving the unemployment rate to a 18-year low of 3.8 percent. Wage growth surprised to the upside with a 0.3 percent gain that validates the comments from U.S. Federal Reserve members about the need for more rate hikes this year.

The U.S. dollar inched up on Friday following the release of expectation-beating employment data which stoked inflation fears and prompted traders to raise bets the Federal Reserve will hike interest rates a fourth time this year.

Sterling languished near a six-month low on Friday despite data showing UK manufacturing growth picked up speed in May for the first time in six months, as worries about Italy’s political crisis and new U.S. trade tariffs dominated the market psyche. Stronger-than-expected economic data this week has...

USDCAD struggled to extend much beyond 1.2980 resistance on Thursday and subsequent congestion has centered around 1.2950. Daily momentum signals are neutral and DMI’s are muted/trendless. The weekly chart is showing a doji (uncertainty) just below the 100 week MA (1.2976).

We highlighted yesterday that the recovery in NZD appears incomplete and there is room for extension to 0.7050. NZD subsequently touched a...

The pair is now trading on the defensive following two consecutive sessions with gains on the back of a pullback in the greenback and some renewed optimism stemming from the...

Broad-based US dollar comeback sent most majors into the red zone, with the Aussie having emerged the weakest, despite a positive surprise delivered by the...

he bearish phase that started earlier this month remains intact as GBP hit a fresh 2018 low of 1.3205 on Tuesday (29 May) before registering an ‘inside day’ yesterday. While the down-move is...

Weaker-than-expected economic data from euro zone has raised questions about whether the ECB will, as expected, wind down its 2.55 trillion-euro stimulus program by the...

With investors looking past yesterday's softer US macro data, renewed pickup in the US Treasury bond yields was seen as one of the key factors behind the pair's goodish rebound from...

“EUR/CHF has recently spiked down to 1.1369. We believe that the move was exhaustive. The daily RSI is in oversold territory. Rallies will find initial resistance offered by the 200 day ma at 1.1657 which is likely to cap. Key resistance is the 55 day moving average at 1.1812, together with the January peak at 1.1833, and while capped here it is offered”.

The Sterling has found some much-needed support from 1.3204 after declining over 8% from April's high of 1.4376. A lack of bullish confidence is likely still present, as the GBP rebounds against the Dollar in conjunction with broader market sentiment.

There are no new headlines coming from Italy other than potential alliances in the upcoming snap elections. The lack of significant newsappears to have removed some tailwinds from the selling mood that hit the shared currency in past sessions.

Analysts at Scotiabank explained that UK shop prices remained soft in May, according to the British Retail Consortium’s survey (shop prices were down 1.1% this month overall, after a 1.0% fall in Apr).

For the third straight day, the troy ounce of gold is having a difficult time moving away from the $1300 handle despite the sharp shifts in the market sentiment. After slumping down to $1296, the XAU/USD pair recovered its daily losses and was last seen trading at $1301.50, where it was up $2.5, or 0.2% on the day.

Sources close to some of Italy’s main parties said there was now a chance that President Sergio Mattarella could dissolve parliament in the coming days and...

The precious metal, for the second consecutive session, struggled to hold on to its gains beyond the $1300 round figure mark and...

Meanwhile, the Antipodeans traded mixed, with the Kiwi better bid on upbeat RBNZ Financial Stability Report (FSR). The Aussie suffered on the back of a bigger-than-expected drop in the...

Analysts at Scotiabank explained that the CAD is weak, down from Monday’s close and extending its recent decline to fresh multi-month lows, a relative performer among the G10 in an environment of risk aversion and broad-based USD strength.

Tariffs on steel, threats of car import levies and intense pressure for a two-way economic deal: despite warm personal ties, U.S. President Donald Trump is giving Japanese Prime Minister Shinzo Abe a decidedly tough time on trade.

Changes in the USD valuation remains as the primary driver of the pair's price action. Following an upsurge toward the critical 95 mark, the US Dollar Index reversed its course in the last couple of hours as a 2% drop seen in the 10-year US T-bond yield hurt the greenback.

Sterling has slumped against the dollar since mid-April as expectations of a Bank of England interest rate rise recede, the economy shows signs of weakness and...

Financial markets fear that the elections, which could take place as early as August, are seen as a quasi-referendum over Italy’s role in the European Union and euro zone and could end up...

Despite full markets returning, we have little of note to report in the European session, except for the Swiss trade figures and Eurozone money supply data. However, the political drama around Italy and Spain will continue to...

The pair's price action on Monday is dominated by the changes in the demand for the greenback. With European currencies suffering losses on political jitters in Italy, investors continue to flee to the USD, which remains a better investment alternative as the hawkish stance of the Fed ramps up the expectations for the bullish rally to continue.

Political jitters in Italy continues to push investors to safer assets. After rising more than 20 basis points, the 10-year Italian T-bond yield refreshed its multi-year high above 2.7% while the FTSE MIB equity index dropped more than 2.5% as the latest developments point to a new election at the end of the summer. However, despite gold's safe-haven status, the pair is having a rough time gaining traction with the FX interest shifting to the buck.

The US Dollar Index (DXY) which measures the greenback relative strength compared with a basket of currencies worldwide is hovering near 5-month highs near the 94.30 as traders have been piling in the USD long trades as they expect the Federal Reserve Bank to hike three times in 2018. Market participants are widely expecting the next rate hike at the June meeting of the Federal Reserve.

The pair witnessed a dramatic turnaround at the start of a new trading week, with the incoming Italian political uncertainty turning out to be a key driver of the sentiment surrounding the...

The market quickly faded early euphoria, led by the failure of an anti-establishment coalition government formation in Italy, with uncertainty over an early election prompting some aggressive selling since the...

Despite a modest US Dollar retracement, led by a sharp spike in the shared currency, the pair continued gaining positive traction at the start of a new trading week. The ongoing slump in...

Forex today was mainly driven by the Euro rebound from half-year troughs, as the EUR bulls were rescued by the Italian politics. The rejection of the Eurosceptic Italian Economy Minister and the resultant failure to form the coalition government turned out to be...

Market events to watch this week

The US dollar was up against majors pairs on Friday ahead of the release of employment data in America. On a weekly basis the greenback gained against the CAD, EUR and GBP but lost ground against the JPY, AUD and CHF after five days that featured...

NZD is mimicking its big brother, commodity-linked currency AUD, which has been supported by stronger gold prices this week. In fact, traders rushed to the metal as the geopolitical picture worsened progressively as the week went on.

Following its strong advance from Thursday, the yellow metal found sellers at the 1,307 level in early American trade as US stock indices futures are trying to reverse the overnight losses. It is now trading at round 1,303.60 slightly down on Friday.

The pair deepened its leg lower today following a wave of buying orders around the greenback, while results from the US docket have also lent support to the buck. In fact, US headline Durable Goods Orders contracted at a monthly 1.7%, while Core orders expanded 0.9% inter-month.

The GBP bulls also seemed little impressed by the second estimate of the UK GDP growth figures, which matched the preliminary reading and confirmed a tepid growth of...

Broader currencies remained in a range with investors digesting a week of heavy newsflow including broadly perceived dovish Fed minutes and mixed European data with the dollar holding below a...

The pair continued with its struggled to make it through the 0.7580 supply zone, with lingering US-China trade war fears to weigh on the China-proxy Australian Dollar. The US President Donald Trump raised the spectre of high US tariffs on...

Today’s EUR calendar offers the German IFO business climate and the second estimate of UK Q1 GDP, which will be reported at 0830 GMT alongside the release of the prelim business investment and...

The dollar fell against a basket of currencies on Thursday and hit a two-week low against the Japanese yen, after U.S. President Donald Trump called off a summit meeting with North Korean leader Kim Jong Un and as traders booked profits following the greenback’s recent rally.

The euro rose off a six-month low on Thursday as the dollar faltered but concerns over an economic slowdown in Europe and political risks in Italy continued to act as a brake. The euro is set to be down for a sixth consecutive week against the dollar — the longest weekly losing streak since January 2015...

The market now seems to have fully digested Wednesday's FOMC monetary policy meeting minutes, with a modest rebound in the US Treasury bond yields helping the US Dollar to...

Spot paid little attention to the release of the FOMC minutes on Wednesday, where the Committee noted that a temporary overshooting of the Fed’s inflation target would be in line with the...

Risk-aversion remained the main underlying theme in Asia this Thursday after Trump brought in fresh tariffs on auto imports while North Korea threatened to call-off the June Summit. The US dollar extended post-FOMC minutes weakness across its...

Analysts at Scotiabank noted that sterling is soft, with Cable reaching its lowest level since Dec. Apr UK CPI data showed prices generally softening, counter to expectations for steady inflation.

The euro fell to near three-month lows against the Swiss franc on Wednesday as fresh data indicating a slowdown in European business activity cast a shadow over the timing of the central bank’s rate hike, while concerns over Italian politics rose.

Sterling fell to a new 2018 low on Wednesday after weaker-than-expected UK inflation cast doubt on whether the Bank of England (BoE) will raise interest rates this year. Annual consumer price inflation cooled to 2.4 percent, its weakest increase since March 2017.

Geopolitical tensions resurfaced after the US President Donald Trump casted doubt on the upcoming historic summit with North Korea in June. Trump also tempered optimism over the progress made in the recent US-China trade talks and...