Summary:
- UK CPI inflation data came in at 9.1% for May.
- BoJ remaining dovish.
- Fears of a recession loom.
Read next: ECB’s Christine Lagarde Eased Fears (EUR/USD, EUR/CHF), Expectations Of A More Hawkish BoE Strengthen (EUR/GBP, GBP/USD)
ECB could benefit from QEQT combination
The market is reflecting bullish signals for this currency pair. The Euro currency could benefit if the European Central Bank (ECB) uses the European continent's fragmented economic landscape to its advantage by combining both quantitative easing (QE) and quantitative tightening (QT) to normalise monetary policy by minimising upset.
The Euro has been recovering against the US Dollar this week. Concerns over a recession in the US have grown as the Fed continue on their hawkish path of fighting inflation.
EUR/USD Price Chart
UK CPI inflation data met market expectations
The market is reflecting bearish signals for this currency pair. The pound sterling weakened against the Euro in the direct wake of the release of UK inflation data which mostly came in as expected, however, some parts of the report came in softer than was expected and could prove supportive of the British pound currency. UK CPI inflation data came in year-on-year in May at 9.1% which beat April's 9.0% and was in-line with the market expectations.
EUR/GBP Price Chart
USD/CAD
The market is slowing mixed market signals for this currency pair. Canadian inflation data came in surprisingly strong for the month of May, which could likely drive investor expectations of a more hawkish Bank of Canada (BoC) interest rate hiking policies going forward, thus likely supporting the Canadian Dollar.
USD/CAD Price Chart
BoJ Continues to opt out of monetary policy tightening
The market is reflecting bullish signals for this currency pair. As the Bank of Japan (BoJ) continues their monetary easing and chooses to stay away from tightening monetary policy, the Euro and other currencies seem to be gaining on the safe-haven asset.
EUR/JPY Price Chart
Sources: finance.yahoo.com, poundsterlinglive.com, dailyfx.com
EUR/GBP Price Chart
