Market Overview 2018-07-16


Euro rises as US Dollar eases on the day of Trump-Putin meeting. The risk sentiment eased on Monday with the Euro trading slightly higher on Monday against the US Dollar at around 1.1700 before the high profile Trump-Putin summit in Helsinki. After hitting its best level since early July, the US Dollar witnessed some profit-taking on Friday following a setback from import prices and consumer confidence data.

The EUR/USD pair rebounded sharply from near two-week lows and ended the day with modest gains, still down around 0.5% for the week. The pair, however, lacked any strong conviction and was seen consolidating in a narrow range at the start of a new trading week. Market participants now look forward to the US monthly retail sales data, due later during the early North-American session, for some fresh impetus. Apart from important US macro data, the Fed Chair Jerome Powell's testimony on the Semiannual Monetary Policy Report will also influence the near-term USD price dynamics and eventually help drive sentiment surrounding the major.

The UK Prime Minister Theresa May asked members of the UK parliament (MPs) to back her in the vote scheduled for later today as Sterling settles itself firmly in mid 1.3200s trading little changed on the upside against the US Dollar.The pair initially weakened in response to comments made by the US President Donald Trump, saying that the UK PMI Theresa May's current soft-Brexit plan would kill any potential US-UK bilateral trade deal. The pair, however, witnessed a dramatic turnaround and rebounded sharply from near two-week lows after Trump, during a joint press conference, softened the stance and spoke about the possibility of a US-UK trade deal.

The pair rallied around 135-pips from an intraday low level of 1.3103 and was now seen trying to build on the positive momentum at the start of a new trading week. Investors this week will confront a slew of important UK macro data - monthly employment details, latest inflation figures and monthly retail sales data, which will influence August BoErate hike expectations and eventually determine the British Pound's near-term trajectory. Apart from economic releases, any incoming Brexit headline might continue to infuse a bout of volatility across GBP crosses. 

Source : Exclusive morning call from FXCC, Monday, 2018-07-16, 07:00 GMT

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