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By xemarketanalysis July 10, 2018 11:38 am
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    XE Market Analysis: Chequered GBP a Top G-10 Performer

    OVERVIEW

    • The Greenback comeback is stronger as trade tensions ease.
    • JPY near a 7-week low on monetary policy divergence.
    • WTI pushing towards the $75.00 a barrel, up 70 cents.

    HIGHLIGHT

    The Indian Rupee remains under pressure as the Greenback rebounds on waning trade war worries. Sustained capital outflows and higher crude oil prices continue to haunt the INR. The currency remains at the bottom of the pile as the worst performer among the Asian currencies.

    US DOLLAR

    The Greenback is gathering momentum, trading higher across the board this morning. The Japanese Yen is the worst G-10 performer, down near a 7-week low as global trade tensions seem to ease. After the political drama of yesterday, the British Pound is the only currency trading higher against the USD. PM May seems to have survived the latest in-party setbacks. The day remains light in terms of data. Headline risks surrounding the NATO meeting could be the main driver.

    BRITISH POUND

    The UK PM survived another in-party battle following the resignation of her Foreign Secretary. GBP is a top performer today as investors seem to focus on the latest economic data instead of politics.  The latest new GDP estimate indicated that the economy is growing, driven mainly by the services sector. This has again fuelled expectations that the BoE will hike its rate at its next meeting in August.

    EURO

    The Germans are feeling less optimist these days. The ZEW Indicator of Economic Sentiment dropped to the lowest level since August 2012. The index was minus 24.7 points in July. Political uncertainty and escalation of international trade war have diminished the economic outlook. The Euro slipped 0.3% to trade near the 1.17 handle.

    CANADIAN DOLLAR

    USD/CAD bounces off a four-week low as investors’ sentiment swing in favor of the US buck. Data released this morning showed building permits issued by Canadian municipalities increased 4.7% in May, reversing a similar fall in the previous month. The housing market remains strong despite higher interest rates and mortgage rules. The Bank of Canada is expected to hike its rates to 1.5% tomorrow but this move has already been priced-in. 

    AUSTRALIAN DOLLAR

    The Australian Dollar followed the Asian currencies lower as the US buck strengthened. Concerns on escalating trade have died out but the market remains fragile. The latest NAB Business Survey was mixed with the business confidence edged down 1 pt. to +6 index points. 

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