- It has been a muted start to the week as markets tread water ahead of Friday’s US employment report and the elections in a week’s time. The big mover in G10 was the Japanese yen, with the currency weakening against the US dollar after the election over the weekend which means the ruling and opposition parties have one month to try to form a government. USDJPY moved as high as 153.88 yesterday after Prime Minister Shigeru Ishiba’s party and coalition partner lost their majority in the election, although the pair clawed back some ground to briefly trade below 153.
- EURUSD remains broadly unchanged with the pair trending lower as the US dollar and US politics continue to dominate. After trading as high as 1.12 at the end of last month, EURUSD is now testing support, with the May 9 low at 1.0724 potentially coming into play. Germany’s GfK consumer confidence index came out at touch better than expected this morning, rising to -18.3 (against estimate of -20.5) in November from a revised -21 in October. Germany continues to struggle, and markets eagerly await upcoming GDP data to see if the euro area’s powerhouse economy slipped into a recession over the summer.
- The pound is rangebound as traders and investors remain reluctant to enter significant positions ahead of the UK budget. After a brief attempt to trade above 1.30 yesterday cable is back on a 1.29 handle ahead of support which comes in at 1.2908. EURGBP is hovering above the key 0.83 level which has been an important level since the Brexit vote back in 2016.
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