GBP/USDForex was lacking a catalyst and the dollar was able to breath higher in yesterday’s session, while US markets were somewhat enthused by earnings season, with Citigroup performing and beating analyst’s expectations.
GBP/USD struggled near a six-month low on Tuesday hampered by persistent worries over Brexit that, in turn, weighed on the euro. Also, USD/JPY fought for traction as the prospect of a Federal Reserve interest rate cut later in the month continued to keep the greenback on the defensive. EUR/USD was little changed at 1.1251 after shedding 0.1% the previous day, constrained by expectations for a dovish European Central Bank meeting next week.
Looking forward, the economic calendar will be on the watch for UK May average weekly earnings due at 08:30 GMT, alongside with UK’s May ILO unemployment rate and claimant count rate. With the BOE already hinting at softness in the domestic/global economy being a potential worry, any weakness in wages/inflation may prompt them to consider moving away from their “gradual, limited rate hike” plan. At 09:00 GMT the Eurozone May trade balance data is released but focus will be at the same time at Germany July ZEW survey current situation.
In the NA session, the focus will be the US Retail Sales data for June at 12:30 GMT. Comments from the US Federal Reserve Chairman Jerome Powell and the Bank of England (BOE) Governor Mark Carney at the French G7 Presidency 2019 will also direct near-term market momentum.
Oil prices dipped on Tuesday, extending losses from the previous session, as output in the U.S. Gulf of Mexico resumed after Hurricane Barry and as U.S. shale production is set to rise to a record.
Gold prices traded higher on Tuesday despite bullish data from the U.S. and China. The gains came despite bullish Empire State manufacturing numbers and other positive industrial production and retail sales data out of China yesterday.