The USD strengthened further, with USDJPY reaching the key 109.500 level and GBPUSD consolidated under 1.40000. The EUR settled into a tighter range as we await the ECB Rate Decision and Press Conference later today. This meeting is expected to be a preamble to the serious business on future policy is done at the June meeting. Today’s meeting should largely address recent economic data weakness but the risk is that any comments will create a volatile move in the EUR.
Swiss ZEW Survey – Expectations (Apr) were 7.2 against a prior reading of 16.7. This data has been weakening since a reading of 52.0 was recorded in December 2017. A reading under 16.7 had not been recorded since December 2016. This illustrates the drop in Economic expectations in Switzerland. GBPCHF fell from 1.37100 to 1.36924 after the data release.
US EIA Crude Oil Stocks (Apr) data was released, coming in with a build of 2.170M against an expectation for a draw of -2.043M barrels, from a previous reading of -1.071M barrels. Oil prices sank on Tuesday, from a high of $69.30 to $67.49, as the private inventories data suggested a surprise build of 1.099M against a consensus of -2.250M and the French and US Presidents discussed a new Iran deal. This build was borne out in this release and prices fell to the $67.05 support, where buyers stepped in and have carried the price back to $68.40. A drop under $67.00 may force downward pressure on prices, but, for now, it marks the bottom of the range up to $69.50.
Bank of Canada Governor Poloz testified along with Senior Deputy Governor Carolyn Wilkins before the Standing Senate Committee on Banking, Trade, and Commerce, in Ottawa. They said that people needed to be prepared for higher interest rates and that they needed to get the timing right to counter inflation. The comment was also made that fiscal stimulus had helped avoid a lower path for rates. USDCAD fell during this event from 1.28657 to a low of 1.28308 as a result but currently is trading at 1.2856.
This article was written by FxPro