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Dean's Daily FX Update – 03 July 2017
In the Zone
- All
Noteworthy News
- Brexit negotiations took its first wobble over the weekend, this comes in a disagreement that the UK will not allow the European Courts have any jurisdiction in the UK. This will be interesting to watch, PM May has to be flexible but one would think that this non-negotiable.
Recap
I think that we could have an interesting week unfold, although we have a US bank holiday tomorrow and possibly a quiet day this afternoon – the economic calendar this week is jam packed culminating in the NFP reading on Friday. We will also see to what extent the ECB and BOE are willing to back up the bullish fronts we saw last week, I was a little surprised to see over the weekend that Brexit negotiations suffered its first wobble.
The opening this week was focused on Tokyo though, there was a little mentioned selection on Sunday evening and it resulted in a big loss for the PM Abe’s party. Although not a general election, it could bring some changes in policy going forward and the JPY opened with a gap higher which subsequently closed. The market will be watching to see how the JPY reacts this week amidst diminishing BOJ monetary policy support and very weak inflation. I mentioned over the weekend that I believe that the JPY holds the key to the major movement this week.
It was a mixed bag out of Australia this morning, some good data and some bad – I suspect that the market will brush this aside and instead wait to see what comes out of the RBA tomorrow. The RBA has been dovish of late and the market will wait to see if the central bank takes the lead from last week and sounds a little more hawkish – I have no doubt that interest rates will be left on hold but it will be the tone of the press conference that will be keenly watched.
As mentioned last week, it seems to be raining daily divergence as the greenback will attempt to stage a mini recovery this week. The video is a little bit longer this morning as we have a lot to cover, but this will be an interesting week.
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