Sterling Rebounds As Risk Appetite Firms
Yesterday the action remained confined to narrow ranges yet again. Of the limited moves to note, sterling managed to recover some lost ground from recent days and has continued to do so this morning during the first hours of trading as risk appetite continues to firm.
So where are we now? EUR/GBP is just below the 86p (1.1650) threshold. Meanwhile, GBP/USD has climbed back up above the 1.37 mark, making a reasonable recovery since opening yesterday closer to the 1.36 level. Elsewhere, EUR/USD continues to trade in the top half of the 1.17-1.18 area.
As we look ahead today, there could be some event risk for the euro. This is due to the ECB holding its July meeting. Although no interest rate changes are expected, the ECB is set to re-phrase forward guidance in light of its recent strategic review – which saw it change its inflation objective to a 2%. It could also delay the current timeline for its quantitative easing programme.
Here are some highlights for the week:
Thursday: Australia goods trade balance, NAB quarterly business confidence; ECB rate decision; US jobless claims, existing home sales.
Friday: Australia PMIs; UK Gfk consumer confidence, retail sales, PMIs; Eurozone PMIs; Canada retail sales; US PMIs.