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Sterling fell to a three-week low against a resurgent yen on Monday after the Japanese currency received a boost from reports that the central bank was contemplating scaling back its stimulus.

After making a decisive recovery on Friday and closing the week near $1230, the XAU/USD pair struggled to extend its gains amid a relatively subdues trading action. With the greenback gathering some strength in the early NA session, the pair started erasing Friday's upside and was last seen at $1225, losing around $7, or 0.6% on the day.

Although it looked like it was able to find support near the 0.74 handle earlier in the day, the AUD/USD pair came under a renewed selling pressure in the last hour to drop to a fresh daily low at 0.7382. As of writing, the pair was trading a couple of pips above that level, losing 0.5% on the day.

President Trump made waves on Friday, after attacking the Federal Reserve’s monetary policy and also taking shots at the EU. Trump criticized the EU and China for manipulating their currencies and keeping interest rates lower.

Also pushing the yen up were comments by U.S. President Donald Trump on Friday criticizing the greenback’s strength, which in turn hit the Japanese stock markets and triggered a further unwinding of short yen positions.

China’s yuan rebounded from more than one-year lows against the dollar on Friday afternoon, driven up on suspected dollar sales by major state banks to prop up a currency that has been hit by a bitter Sino-U.S. trade conflict.

Market events to watch this week

The USD fell against major pairs on Friday after US President Donald Trump tweeted that China and the EU manipulate their currency. Trade war escalation has reached a second phase at a time when American politics are having an identity crisis with the ongoing Russian interference during the 2016 elections.

CME Group’s advanced data for GBP futures markets noted open interest rose by almost 5K contracts on Thursday vs. Wednesday’s final 196,891 contracts. In the same direction, volume increased by around 10.3K contracts.

This month’s year-over-year CPI increase follows a year of gradual acceleration in consumer price inflation, from a recent low of 1.0% year over year in June 2017. This trend reflects increases in prices for gasoline and food purchased from restaurants, as well as offsetting factors such as lower price inflation for electricity and telephone services.

Analysts at Nomura suggest that the next BOJ meeting on 30-31 July represents interesting event risk for Japan trading and fundamentally, they believe the meeting will be negative for JPY in the medium term.

The Times carried a story on Friday, citing that the Britons will from next week start receiving weekly information bulletins from the UK government about how to ensure they’re ready for a disorderly Brexit, Reuters reports.

As a result, at time of writing CNH had tested past 6.8350 and was trading at 6.8183. That is through the line in the sand I had thought the PBOC would set before they seemed to set 6.70. Now perhaps we don’t have any lines or any sand at all.

The bullish tone in the cross is poised to remain unchanged while above the daily cloud and June’s tops in the 130.40 region. This area appears reinforced by the short-term support line and the top of the cloud in the 128.80 region.

The Canadian dollar has posted considerable losses in the Thursday session. Currently, USD/CAD is trading at 1.3266, up 0.73% on the day. On the release front, Canadian ADP Nonfarm Employment Change plunged, posting a reading of -10.5 thousand. This was the first decline of 2018. In the U.S, manufacturing and employment data were better than expected.

The slump for gold has mounted as the Dow Jones Industrial AverageDJIA, +0.32% and the S&P 500 index SPX, +0.22% have mostly been in a recent uptrend in recent weeks, with the Dow marking its fifth straight winning sessionon Wednesday before a sluggish turn early Thursday. Gold tends to fall as stocks climb because it is viewed as an asset that appeals to investors in times of uncertainty and fear.

The pair once again failed to make it through the 0.7440 supply zone and the initial leg of retracement slide was triggered by resurgent US Dollar demand, which continued benefitting from upbeat economy outlooks from the Fed Chair Jerome Powell and the central bank’s Beige Book report.

Focus is on the retail sales report for June and what it could mean for the path of interest rates. Economists expect sales to have gone up 0.3% month-on-month, pulling back from growth of 1.3% in May.

The dollar rose on Tuesday as Federal Reserve Chairman Jerome Powell provided an upbeat assessment on the U.S. economy while downplaying the impact of current global trade policy discussions on the outlook for further monetary tightening.

Reuters reports comments from the Chinese Foreign Ministry on the US-China trade war, with the key headlines found below. The trade war has become the biggest 'confidence killer' for the global economy. The US is fabricating all kinds of excuses on trade, including the excuse of national security.

Sterling fell in early European trading on Wednesday as worries about British Prime Minister Theresa May’s ability to push through her Brexit plans and a rallying dollar further hit the pound.

Sterling, meanwhile, firmed but held near eight-month lows on Tuesday as it suffered amid a growing rift within Prime Minister Theresa May’s Conservative Party over Brexit. With less than nine months to go until the U.K. leaves the European Union, the pressure is on to chart the course for trade, financial transactions and more, and is posing a fresh headwind for the pound.

Analysts at RBS point out that UK GDP grew by 0.3% between April and May, strong enough to lift the three-monthly growth rate from nothing to 0.2% and as a result of that even after very moderate growth in June, which seems likely, and the UK will match its post-2000 average of 0.4% in Q2.

The pair’s buying bias stays well and sound so far today, although spot met a strong resistance area in the mid-1.1700s. The 55-day sma, the base of the daily cloud and a retracement of the April-May descent reinforce this hurdle.

The sentiment picture is even less encouraging today. With gold down another $15 since that late-June column, we’d otherwise expect the average recommended gold exposure level to be even lower than minus 13%. That’s because the normal pattern is for market timers to become more- and less bullish along with the market’s rallies and declines. That the average market timer did not behave in this way suggests there is a strong undercurrent of stubbornly held bullishness in the gold market.

The dollar edged down on Tuesday ahead of congressional testimony by Federal Reserve Chairman Jerome Powell which traders will scrutinise for clues on the pace of U.S. interest rate rises and risks emanating from trade conflicts.

Canada’s regional housing surveys were mixed, but analysts at TD Securities are looking for the national housing sales figures (originally scheduled for release on Friday) to be little changed between May and June.

GBP/USD Technical Analysis: Cable quietly gaining ground currently supported at 1.3250 level GBP/USD is currently in a 40-pip pullback from the daily high established at 1.3293. GBP/USD is attempting to find support near 1.3250 close to the bullish trendline and the 50-period simple moving average. Bulls targets are the 1.3300 figure and 1.3363, last week’s high. If 1.3250 fails to hold prices the pullback might extend towards 1.3225 intraday swing low and 1.3200 figure.

Should the two primary market gauges stay in correction through the close of trading on Monday, that will mean they are in their longest such stretch since 1984. In that stretch, it took the S&P 122 days to emerge from correction territory, and the Dow 123 days, according to the WSJ Market Data Group.

European stocks had a sluggish start as trading got underway, as mining stocks were dragged down after data showed China’s gross domestic product slowed slightly in the second quarter. The Stoxx Europe 600 Basic Resources IndexSXPP, -0.58% fell 0.5%.

In the meantime, traders will look forward to the release of US monthly retail sales data, a key highlight from today's economic docket, in order to grab some short-term opportunities. A follow-through up-move beyond $1247 area is likely to lift the commodity back towards $1252-53 supply zone en-route the next major hurdle near the $1258 region. On the flip side, $1240 level might protect the immediate downside, which if broken might drag the metal further towards 200-week SMA support near the $1234 region.

The dollar eased a bit against most major currencies on positive trade talks between China and the European Union although softer economic data from China and Beijing’s escalating trade war with the United States tempered the enthusiasm. Chinese Premier Li Keqiang said on Monday the country will raise its market access and reduce tariff rates as it seeks more balanced trade with the European Union.

The US dollar was higher across the board against major pairs on Friday. Trade war concerns rose heading into the weekend and the comments from US President Donald Trump during the week sparked a rally of USD buying. Trump has been outspoken on NATO, trade and the Brexit deal while...

The pair managed to find decent support near monthly lows, set on July 2 and was supported by comments from BoE Cunliffe, saying that softer Q1 activity was driven by poor weather and the growth path remains broadly intact.

In 2016, the market began to run into fatigue on BoJ QE policy, doubting that it was working to generate inflation, and predicting that the Japanese government and BoJ would lose patience with its perpetual soaking up of JGBs. It seemed as if the BoJ was out of bullets and it proved reluctant to further expand its QE asset purchases even as USD/JPY fell.

The support at 0.6750 highlighted yesterday was slightly breached as NZD touched a low of 0.6748 before rebounding. Downward pressure has eased with the recovery and the current movement is viewed as part of a consolidation phase. In other words, NZD is expected to trade sideways for today, likely within a 0.6750/0.6805 range

Traders appeared to be hesitant to continue Thursday’s rally, when markets rose on signs that Washington and Beijing are willing to resume trade talks, which could end in a bilateral agreement and avoid a trade war.

The euro fell to a eight-day low on Friday as U.S. inflation numbers boosted interest rate expectations and an easing in trade tensions between the United States and China supported the dollar.

There is not much to add as EUR traded within a relatively narrow range yesterday and ended the day unchanged (closed at 1.1671 in NY, 0.00%). The neutral phase that started last month remains intact and for the next one week or so, we continue to expect EUR to trade sideways, likely between 1.1590 and 1.1760.

The XAU/USD pair spent the first half of the day fluctuating in a relatively tight range amid a lack of fresh catalysts. At the beginning of the NA session, however, the pair gained traction following the macroeconomic data releases from the United States and touched a new session high at $1247.65. As of writing, the pair was up $5 on the day at $1246.15.

The pound rose on Thursday as traders bet that a Brexit white paper policy document could help restart negotiations on trade between the European Union and Britain for when it leaves the bloc next March.

President Donald Trump said U.S. commitment to NATO is “very strong” and “we have a very powerful NATO” after a heated meeting of allied leaders in which he demanded members immediately meet the 2% military-spending target set for 2024, according to diplomats and people familiar with the matter.

The incoming US economic data, with the latest PPI print showing that wholesale prices rose at the fastest yearly rate in almost seven years, reaffirmed expectations that the Fed would hike interest rates at least two more times in 2018 and prompted some aggressive selling around the non-yielding yellow metal on Wednesday.

According to CME Group’s preliminary figures for EUR futures markets, open interest increased moderately by almost 21.7K contracts on Wednesday from Tuesday’s final 477,596. Volume followed suit, up significantly by around 74.5K contracts.

Below are some of the key results from the BoE's Credit Conditions Survey report, released this Thursday. Q3 default rates for lenders of unsecured loans seen up again. Demand for consumer lending is expected to rise in the next 3 months, supply to fall slightly.

Benchmark 3-month copper futures in London hit their lowest in nearly a year, before recovering slightly. The metal is used in manufacturing and construction, which makes it sensitive to economic conditions.

The Canadian dollar has posted slight losses in the Wednesday session. Currently, USD/CAD is trading at 1.3154, up 0.31% on the day. On the release front, In the U.S, the focus is on inflation reports, with PPI and Core PPI both expected to soften to 0.2%. The Bank of Canada will set the benchmark rate and release a rate statement. On Thursday, Canada publishes New Housing Price Index.

Reuters quotes sources within the Chinese state media, citing that the Chinese government has issued strict rules limiting the coverage on the US-China trade war. The Govt is worried that unrestrained reporting could spark instability or roil its already jittery financial markets.

Currently trading around the $1251 region, the commodity has lost over 1% from near two-week tops touched on Monday and seemed unaffected by reviving safe-haven demand led by escalating US-China trade tensions.

The U.S. dollar rose to near a six-month high against the safe-haven Japanese yen on Tuesday and emerging market currencies like the Mexican peso, Brazilian real and Russian rouble also rose as global economic momentum appeared so far unscathed by trade tensions, prompting investors to buy riskier assets.

The selling bias prevails around the European currency on Wednesday and is now motivating EUR/USD to extend the sideline theme in the low-1.1700s. EUR/USD looks to trade, ECB-speak. The pair is down for the second day in a row, extending the rejection from Monday’s tops in the boundaries of 1.1800 the figure against the backdrop of increasing concerns over the US-China trade war.

This coupled with positive trading sentiment around European equity markets, pointing to improving risk appetite, further dented the precious metal's safe-haven appeal. The risk-on mood was reinforced by an uptick in the US Treasury bond yields, which exerted some additional downward pressure on the non-yielding yellow metal.

Speaking to reporters before boarding Marine One, Trump said the U.K. political situation was one with turmoil. Several ministers, notably Foreign Minister Boris Johnson, quit over a disagreement on how the country should leave the European Union after Prime Minister Theresa May had appeared to unite sparring factionsover the Brexit plan late last week.

The DAX index has posted gains in the Tuesday session. Currently, the DAX is at 12,602, up 0.47% on the day. On the release front, On the release front, German ZEW Economic Sentiment dropped to -24.7, a sharper drop than expected. The forecast stood at -17.9 points. Eurozone ZEW Economic Sentiment followed a similar trend, dropping to -18.7 points. This reading was weaker than the estimate of -13.2 points.

We highlighted yesterday that the outlook for EUR is ‘positive’ and were of the view that a “break of 1.1790 could lead to rapid rise to 1.1850”. The 1.1790 resistance was subsequently ‘tested’ but held (high of 1.1790 during NY hours). From here, it is too early to rule out another attempt to crack 1.1790 and only a move back below the ‘key support’ at 1.1680 (level previously at 1.1665) would indicate that a temporary top is in place.

The blue-chip gauge turned positive for the year on Monday, flipping to a 0.2% gain, while the S&P and tech-laden Nasdaq have advanced b 4.1% and 12%, respectively, as of Monday’s close.

The precious metal extended overnight retracement slide from two-week lows and was weighed down by a combination of negative factors - a goodish pickup in the USD demand and fading safe-haven demand.

EUR/USD gave up the pre-North America games falling below the 21-hr SMA at 1.760, where previously, EUR/USD has made a London session high of 1.1790. The single unit has scored a session low of 1.1740.

Gold futures prices climbed Monday, with the recent retreat in the U.S. dollar helping to put the metal on track to notch its strongest level in roughly two weeks, as investors tested key chart territory for bruised bullion.

The British Pound is now trading into the negative territory at the Cable tumbles to lows at 1.3240 after Johnson quits.Sterling suffers after D.Davis,B.Johnson resign.

The GBP/USD pair stalled the Asian rally near 1.3360 and reversed nearly 30-pips in Europe, now heading back towards the 1.3300 demand zone, as markets digest the latest UK political headlines.

The dollar struggled near 3-1/2-week lows against its peers on Monday after U.S. jobs data showed slower-than-expected wage growth, while the pound retreated as a key member of Britain’s cabinet resigned over Prime Minister Theresa May’s Brexit plan.

We highlighted last Friday (06 Jul, spot at 1.1690) that the “undertone for EUR has improved further” and there is “scope for a move to 1.1750 within the next few days”. EUR subsequently took out 1.1750 with ease and the strong and rapid up-move suggests that further EUR strength is likely in the coming days

The US dollar fell against major pairs on Friday despite a strong June jobs report due to the impending start of tariffs against Chinese goods and the retaliation from the Asian nation on US exports. The US economy added 213,000 jobs and wages rose 0.2 percent but...

Today's crucial employment data from the United States showed that nonfarm payrolls grew by 213K in June to surpass the market expectation of 195K. However, amid a surprise increase in the labor force participation rate, the unemployment rate rose to 4%. More importantly, the wage inflation stayed unchanged at 2.7% on a yearly basis to miss the experts' estimate of 2.8%.

After moving sideways in a tight range between 110.60 and 110.70 in the last hours, the USD/JPY pair came under a renewed selling pressure and fell to a fresh session low at 110.46. As of writing, the pair was trading at 110.52, down 0.13% on the day.

Concerns about fraying relationships between the U.S. and its longstanding trade partners in the European Union, North American and China, have helped strengthen the dollar and have weighed on commodities priced in the monetary unit, including bullion.

The perceived lack of progress in talks with Brussels over Britain’s exit from the EU in March, 2019, has weighed on the pound this year. Combined with signs of economic weakness, it has pushed the currency to near seven-month lows.

With the US-China trade war officially underway, markets turn jittery after the initial positive reaction, as they evaluate the impact of the tariffs war on the global economic outlook. This explains the consolidative mode seen in the US dollar across its main competitors, which keeps the upside capped in the spot.

We highlighted yesterday (05 Jul, 1.1660) that we detected an improvement in the underlying tone and the near-term bias is for EUR to “test the top end of the expected 1.1570/1.1750 consolidation range”. EUR subsequently hit...

After a feeble start to 2018, the British economy is showing tentative signs of a recovery with surveys for the manufacturing, construction and services sectors this week beating expectations. That has brought some respite for sterling after weeks of losses driven by a strong dollar and worries about whether Britain can secure a trade deal with the European Union before it leaves the bloc next March.

Despite the broad-based greenback weakness, the USD/JPY pair was able to continue to retrace Tuesday's sharp losses as the JPY struggled to find demand as a safe-haven in the risk-on environment. However, the disappointing macroeconomic data releases from the United States triggered another USD sell-off and forced the pair to erase a portion of its daily gains. As of writing, the pair was trading at 110.57, up 0.06% on the day.

Worries about a spat between the two largest economies, China and the U.S., have rattled investors, and weighed on both equities and gold, the latter of which ordinarily would benefit from the uncertainty fostered by the dispute over global trade imbalances.

The pair built on last week's goodish recovery move from fresh YTD lows and has so far, held with a positive bias for the fourth session in the previous five. The incoming positive UK economic data, combined with the ongoing US Dollar retracement slide continued driving the pair higher and helped build on its momentum beyond the 1.3200 handle.

Despite the latest leg lower, the major remains well bid and looks to regain the 1.17 barrier, as the common currency continues to derive support from the latest Bloomberg report, citing sources that some ECB members see a rate hike at the end of 2019 as 'too late.'

There is not much to add as EUR spent another day ‘going nowhere’ yesterday and ended the day unchanged (closed at 1.1654, 0.00%). We have held the same view since Monday (02 Jul, spot at 1.1670) wherein the current movement is viewed as part of a consolidation phase and EUR is expected to trade sideways to slightly higher, likely within a 1.1570/1.1750 range.

Canada’s manufacturing sector continues to expand. Canadian Manufacturing PMI improved to 57.1 in June, the highest level since the survey started in 2010. The strong numbers are all the more impressive, given the deadlocked NAFTA negotiations and recent tariff spat between Canada and the United States.

The currently confirmed tariff of 25% on USD 34bn of goods implies a net export loss of less than 0.2% of GDP. Given the likelihood of Chinese companies directing their exports to other markets and the authorities stimulating domestic demand to replace the exports lost, the final impact on the Chinese economy is likely even smaller than estimated here.

The pair's sudden reversal of around 50-pips since the early European session lacked any obvious fundamental trigger and could be solely attributed to some renewed USD buying interest.

Demand for options that protect investors against swings in the dollar against the offshore yuan shot up after the yuan’s latest moves. One-month implied volatility for the dollar against the yuan, which is based on prices for such protective currency options, has surged to near its highest level since February and is almost double its five-year average, according to Thomson Reuters.

However, it remains to be seen If the major can hold the 1.16 handle in the day ahead, as better-than-expected German and Eurozone June services PMI data could rescue the EUR bulls.

EUR traded in a muted manner yesterday and registered a relatively narrow range. We continue to hold a neutral view but detect a positive underlying tone. Overall, the current movement is viewed as part of a broad consolidation phase and EUR is expected to trade sideways to slightly higher, likely within a 1.1570/1.1750 range.

The DAX is coming off another rough week, in which it declined 1.5 percent. Recent trade tensions are threatening to hamper the eurozone export sector, which in turn could weigh on manufacturing output. Investors are keeping a close eye on German and eurozone manufacturing PMIs, which are bellwethers of the strength of the manufacturing sector.

According to the latest headline floating on the wires, the head of PBOC's research institute was noted saying that the recent weakness in Chinese Yuan is not a result of PBOC guidance but has been a recurring theme during the Asian sessions.

Global Dairy Trade (GDT) will release its dairy price index, which is published every two weeks and uses a weighted average of the percentage changes in dairy prices sold at auction. New-Zealand relies heavily on exports and up to 20% of the total its exports are made up of dairy products. Hence the index has gained relevance lately and could significantly influence the Kiwi.

Today’s Riksbank decision keeps alive hopes that a thin wedge of policy divergence could emerge between the Riksbank and the ECB and in line with this, the FX market has keyed onto the more hawkish elements of the announcement, according to analysts at TD Securities.

Sterling fell toward an eight-month low against the dollar on Monday after stronger-than-expected manufacturing sector data failed to temper investors’ concerns about a Brexit cabinet meeting later in the week.

Forex Today was a mixed bag with most G10 currencies trading on the back foot, despite broad-based US dollar weakness, as cautioned prevailed amid risk-off in the Asian stock markets, with the July 6 tariff deadline nearing. More so, continued Yuan weakness combined with downbeat fundamentals added to risk-averse market conditions.

Last week was another trade war week, as the market has been looking for clues on the Chinese retaliation measures against the Trump tariffs that are planned to go live on 6 July, according to analysts at Nordea Markets.

The CAC index is under pressure in the Monday session. Currently, the CAC is at 5284, down 0.74% since the Friday close. On the release front, the markets are digesting manufacturing reports. In France, the Manufacturing PMI dropped to 52.5, shy of the estimate of 53.1 points.

We have held the same view since last Thursday (28 Jun, spot at 1.1560) wherein a break of the major 1.1505/10 support would not be surprising, the “prospect for a sustained decline is not high”. EUR subsequently hit a low 1.1525 during NY hours on Thursday before staging a surprisingly strong and sharp rally that hit a high of 1.1690 on Friday.

Details showed that output slowed, new orders were up a touch, job creation was the only strong-ish point (best level in 3 months), and higher input costs were partially passed through into higher output costs.

U.S. stock futures lost ground Monday, with investors staying concerned about trade fights as the year’s second half starts, after President Donald Trump talked tough again on trade with the European Union.

The sell-off seen in the European equities at the start of the third quarter intensified the risk-off moods, spurred by the renewed German political jitters, which offered a fresh boost to the safe-haven bids for the Yen.

Market events to watch this week

Canadian businesses remain optimistic as evidenced by the Bank of Canada (BoC) Business Outlook Survey published on Friday. The main caveat is the survey was taken a month ago, before anti-trade comments reached a different pitch.

Earlier today, the data from the United States showed that personal spending increased 0.2% in May to fall short of the market estimate of 0.4%. Moreover, the final reading of the UoM's Consumer Sentiment Index dropped to 98.2 from 99.3, highlighting that Trump administration's trade policy was causing concerns among consumers.

The Bank of Canada has recently published its Business Outlook Survey for the second quarter of the year, with key highlights, via Reuters, found below.

Here is a wrap of the main cryptocurrency and blockchain news over the past 24 hours.Bitcoin Back Below $6K To Set New Low Thus Far In 2018 Bitcoin lost ground Friday morning to fall below $6,000 and the top cryptocurrency hit a new low for the year thus far on weaker volumes amid rising concerns over stricter regulation for the nascent market across the world.

The euro gained on Friday after European Union leaders reached an agreement on migration that eased pressure on German Chancellor Angel, but traders said the gains may be short-lived because of deep divisions within the EU.