US DOLLAR
The currency market is relatively quiet as Fed Chair Powell takes to the centre stage. He is set to speak at the Boston Fed today and then appear for his semi-annual monetary policy testimony at the Congress. We expect him not to stray away, too much from his recent comments with the central bank heavily data-dependent. The economic calendar is light today and the US Dollar Index is trading with a mild positive bias. Politics and noises from the Twittersphere may inject some short-term volatility.
CANADIAN DOLLAR
USD/CAD is consolidating within a tight range after climbing above the 1.31 handle. There is not much economic data to feed on and recent move can be attributed to recalibration in the market ahead of key event risks: Bank of Canada announcement and Fed Powell’s testimony.
EURO
The Euro is trading with a negative bias, hanging onto the 1.12 handle this morning. Soft incoming data continues to beset the euro-area. Italian retail was down 0.7% in May as per latest report released this morning. This is the fourth successive month of no positive growth and there are growing calls for the ECB to expand its stimulus policy in a bid to revive the regional economies.
BRITISH POUND
The British Pound continues its south-bound journey, down 0.45% this morning and dropping to its lowest level since January. Once again, growing uncertainty about Brexit and soft incoming data weigh on the currency. Report from British Retail Consortium showed sales decreased by 1.6% from June of last year. Consumers are turning prudent, avoiding non-essential expenses over lack of clarity in the EU-UK relationship.
JAPANESE YEN
The greenback further strengthened against the Japanese Yen, now knocking on the 109 post. USD/JPY is up nearly 0.1% today with the Yen biting the dust following a massive drop of machine tool orders (minus 38% year on year). The data series remain deep in negative territory. After yesterday’s decline in machine orders, investors are fearing a severe economic slowdown appearing in medium term.
