All eyes on the USD
Not a great deal in the way of movement so far this morning although the Dollar seems to be the main focus of interest.
The news coming out of the US has been reasonable lately although Friday’s latest industrial report was a little disappointing. US industrial production was unchanged in May while markets had been expecting at least small rise.
Industrial capacity utilisation, a measure of how fully firms are deploying their resources, edged down to 77.6% from 77.7% in April, still 2.6% percentage points below its estimated long-run average.
Despite weaker than expected data the US dollar managed to consolidate with EUR/USD trading below the $1.3350 level early this morning while GBP/USD begins this week around the $1.57 mark.
Looking at the week ahead, the G8 two-day summit in Northern Ireland starts today ahead of the Fed rate meeting on Wednesday. Although the news flow from the G8 may be important, the FOMC looks to be the main event, with much of last week’s FX volatility driven by speculation about the timing of any Fed QE tapering.