- US data released yesterday showed that Consumer Confidence cooled slightly in June, with the print coming in at 100.4, down from 101.3. The report showed that confidence in the US remains at low levels due to uncertainty around the economic outlook. The US dollar took the news within its stride, with the dollar index broadly unchanged and EURUSD hovering above 1.07. Markets continue to focus on the outlook for US interest rates, and yesterday Federal Reserve Governor Lisa Cook said that it would be appropriate to reduce interest rates “at some point” adding that she expects inflation to improve gradually this year before more rapid progress is made next year. She continued with the well scripted recent Fed speak adding, “the timing of any such adjustment will depend on how economic data evolve and what they imply for the economic outlook and balance of risks.” Interest rates in the US have now been unchanged for almost a year, with officials at the FOMC continuing to say that they need to see more data to be convinced that inflation is on a sustainable path towards the central banks 2% target.
- USDJPY continues to grind higher, trading close to the psychological 160 level, where some analysts suggest that the BoJ may be looking to intervene again. The yen has fallen around 12% against the greenback this year and month end rebalancing and Friday’s key PCE inflation data may be the triggers needed to test the resolve of the BoJ.
- Elsewhere, the Aussie dollar posted gains after the May inflation report came in higher than expected for a third straight month. The print came in at 4% against expectations of 3.8% and boosting bets that the RBA will be forced to resume raising interest rates at its next policy meeting.
We are using cookies to give you the best experience on our website. Download the GPS Cookies Policy for more information. The main types of cookies we use are as follows: strictly necessary cookies, performance cookies, advertisement cookies, and analytics cookies. You can find out more about which cookies we are using or switch them off in settings. Except for strictly essential cookies, you have also the option to decline the usage of cookies at any time. You can do this through this cookie management panel, which appears when you first visit, and you can access it independently through the link provided at the foot of the page.