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Euro Trying to Follow GBP Restoral

During European trades, the euro/dollar fell to 1.1255 due to weak Eurozone inflation data. The definitive April CPI fell 0.2% YoY and was 0.0% MoM (previous: 1.5%). The ECB will now need to continue its fight against deflation, thereby negatively affecting the euro.

The GBP rose from a 1.4402 minimum to 1.4555 (+153 points). It definitely didn’t strengthen against the dollar and other key currencies because of the UK labour market data. Such sharp unexpected fluctuations happen when preliminary survey results regarding a Brexit are published, or when an act of terrorism takes place. There was no act of terrorism and no news out. Probably, the number of Brits wanting to remain in the EU increased. We’ll find out about that later. According to recent data, those wanting to stay are at 55%. The further hastening of the pound led to the fall in the euro/pound cross.

The pound gathered pace. It could stop at its current 1.4550 level, just as it could rise to 1.4580 whilst the crosses are supporting it. The market is now incorporating a soft-toned set of Fed minutes into prices. I’m not bothering on forecasting tonight’s movements. It’s better to stay off the market until Thursday.

Attention:

Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.

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