The greenback rebounded overnight, lifted by a firmer CPI print for
May at 0.4%m/m compared to the 0.3% in the month prior. Year-on-year, price
pressures picked pace to 2.1% from the previous 2.0%. USD bulls see hopes of
a possibly less dovish FOMC statement tonight but apprehensions capped
aggressive bids. In other data, housing starts softened to 1001K in May from
the previous 1071K. Earlier in the session, UK also released inflation
numbers and softer print of -0.1%m/m for May saw GBP/USD chopped around the
1.6960-level before steadying around the mark for the rest of NY session.
The pound still retains much of its strength despite the decline in
CPI, possibly because of the BOE Minutes that is due later today. Talks of
more hawkish voters kept dips supported for the pair as bulls still eye
1.70-figure.
This morning, Japan’s trade deficit widened less than expected to
JPY909.0 bn from previous JPY811.7bn. Exports shrank -2.7%y/y, more than
expected while imports also disappointed with a decline of -3.6%. BOJ
releases its Minutes for its 13 Jun meeting which should not have much impact
on the range-trading JPY crosses.
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