Very little to highlight from Tuesday’s session apart from a turnaround in risk sentiment, which is likely to have been led by some support emerging in GBP.
We hit a 1.3118 low in cable in the North American session Monday, and as EUR/GBP topped out in the mid .8300s, the recovery gathered some momentum in the overnight session. London then continued the spot move through 1.3400 before the latest retracement.
USD/JPY has also managed to dig in well ahead of 101.00, with the snap back from pre 99.00 post Brexit assumed to have had a lending hand from the BoJ, but proving favorable to global stock indices – Europe continuing the modest gains from Asia. Wall Street showing even stronger gains to lift the leading JPY rate to session highs around 102.75.
Trade a little more mixed in the likes of AUD, NZD and CAD, though early gains in oil price suggested a potential USD/CAD return to 1.2900. This has failed to materialize despite near-term risk-on, with 1.3100 now looking more likely as the USD index seems to be directing all the majors in the same direction.
US Q1 GDP (3rd read) saw minor revisions, but is too far back to matter at the present time, with the market awaiting more recent US data to determine Fed thinking with the UK referendum now out of the way.
The CHF has finally given up some ground, which will come as welcome relief to the SNB, though cautions EUR/CHF gains seen above 1.0800.