The pound was able to strengthen against its FX trading counterparts as exit polls of the Scottish referendum indicated a margin in favor of the “No” votes. This suggests a good chance that Scotland will stay in the UK and that political and economic uncertainty might be avoided. The official results won’t be released until the end of the trading week, which suggests that exit polls might still continue to drive pound movement until then. UK retail sales came in line with estimates of a 0.4% uptick. There are no reports due from the UK today.
The US dollar recovered ground against most of its major FX trading counterparts, despite mixed data from the US economy. The Greenback was able to advance to the commodity currencies and the yen, while giving up some ground to the euro and the pound. Initial jobless claims came in at 280K, lower than the estimated 312K figure. However, building permits and housing starts both fell short of estimates while the Philly Fed index slipped from 28.0 to 22.5. There are no reports due from the US economy today, which suggests that risk sentiment and profit-taking ahead of the G20 Summit this weekend might be seen.
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The euro rallied to the yen but lost ground to most of its major FX trading rivals, as the ECB’s targeted long-term refinancing operations began. There were no reports released from the euro zone then while today has only a couple of medium-tier releases on tap, namely the German PPI and current account. Weak data could keep euro gains in check while strong figures could allow it to stay afloat.
The franc rallied after the SNB decided against implementing negative deposit rates or announcing intervention measures for now. While the SNB did have a strong resolve to defend the EURCHF floor and to ward off deflation, their lack of action was seen as a reason to close short franc trades for the time being. There are no reports lined up from Switzerland today.
The yen continued to give up ground to most of its FX trading counterparts, taking USDJPY to new highs not seen since 2002. Officials have been giving cautious assessments of the Japanese economy, citing that yen weakness might actually help spur inflation and growth. Japan’s all industries activity index is due today and a weak reading below 0.4% might lead to more yen losses.
The comdolls lost further ground to the dollar but managed to score some wins against the yen. New Zealand visitor arrivals slipped by 3.0% recently while credit card spending slipped from 4.5% to 4.2%. Canadian CPI and wholesale sales are due today and might spur more FX trading volatility for the Canadian dollar.
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