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Dean's Daily FX Update – 08 June 2017
Noteworthy News
- On the day when one former FBI Director is to testify, the President has taken the opportunity to nominate the new FBI Director – talk about timing.
Recap
The market has been braced for this day for most of the week and we saw some of the pair’s trade in very tight ranges yesterday. We do not really know what the day has in store but what we do know is that headlines tried its best to eliminate some of the unknowns yesterday. Former FBI director Comey published his opening statement early yesterday and it looks as though it is what he is going to testify around. The statement did not contain anything that was not known and we saw the dollar liked it.
Sources out of the ECB leaked that Draghi will today cut inflation forecasts for 3 years but at the same time he will be able to boost growth. These two headlines was effectively EUR neutral as the currency first weakened by 70 pips and then recovered those losses.
We have seen the roller coaster that the polls have put on the GBP over the last 2 or 3 weeks, for the last couple of days though these polls have been somewhat predictable, with Labour gaining on the Conservatives, yet not enough to prevent a majority parliament.
The only real surprise come yesterday in the form of massive oil inventory build out of the US, when the market was looking for a massive draw. Oil took a hammering as it spiralled down by almost $2, this in turn was the catalyst for a massive move in the USDCAD with price weakening by almost 80 pips in no time.
There are not going to be any daily ranges this morning, and I have purposely not included levels in this report this morning as with the day ahead it could be uncertain. I hope that the day goes ahead as what has been released yesterday as this will allow for a smoother day. From where I sit, most of the volatility will come in the GBP today with the rest of the pairs looking braced for a dollar rally.
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