- It has been a quiet start to the week with the US dollar slipping a touch against its G10 peers as markets consolidate ahead of month end related flows. The dollar index is a little lower with most currency pairs continuing to trade within recent ranges. The Japanese yen posted gains against both the greenback and the euro as the currency approached the area where the government intervened to support the currency earlier this year.
- EURUSD is consolidating around 1.0735 this morning as politics continue to influence the single currency ahead of the first round of French elections this weekend. Investors sold French assets as soon as the election was called fearing that a new administration would further stretch the country’s budget deficit. Things have calmed down a tad in recent days however French President Emmanuel Macron said that the agendas of the far right and far left pit people against each other, going as far as saying that “extreme” parties could spark a “civil war.” The Ifo survey, released yesterday showed that Germany’s business outlook worsened for the first time in five months, with the expectations gauge falling to 89 in June from 90.3 in the previous month. Officials at the ECB would have taken note, with the data suggesting that the fragile recovery in Europe’s largest economy faces ongoing headwinds.
- A lack of significant UK data has left the pound on the side lines this week, with GBPUSD treading water in the middle of its recent 1.2650 to 1.2850 range. Final GDP data for the first quarter is due out later in the week, but until then month end flows and the greenback are likely to be the biggest influences on the pound.
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