US CPI Data Due On Friday Offers USD Support (EUR/USD, USD/JPY, USD/CHF), Pound Sterling Rallies Against Euro Due To The ECB Press Conference Ambiguity (EUR/GBP), USD/GBP
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Summary:
- The ECB turned hawkish and announced its plans to increase all interest rates in July by 0.25%.
- The ECB press conference started, the path forward became ambiguous again.
- Markets awaiting US CPI data offer support to the US Dollar.
US Dollar strengthening ahead of US CPI data release,
The market is reflecting bearish signals for this currency pair. On Thursday the European Central Bank (ECB) turned hawkish and announced its plans to increase all interest rates in July by 0.25% and left open possibility for further hikes in September. However, the ECB press conference made clear to the market that there are circumstances in play that could struggle to keep up with the recently escalating market expectations, which could potentially explain the weakening of the Euro.
The US CPI data for May is on schedule to be released during the trading day on Friday, which is offering support for the US Dollar.
EUR/USD Price Chart
GBP rallies in response to ECB ambiguity
The market is reflecting bearish signals for this currency pair. The Euro tumbled on Thursday when the European Central Bank's (ECB) president Christine Lagarde sent the market mixed messages regarding the future policies. The written statement signaled a 0.25% increase in all interest rates in July, however, once the press conference started, the path forward became more ambiguous again, causing the Euro to lose against the Pound sterling and the US Dollar.
EUR/GBP Price Chart
US CPI data offers USD support.
The market is reflecting bullish signals for this currency pair. The US Dollar is being supported by strong market expectations for US CPI data. In addition the Bank of Japan (BoJ) is continuing its dovish approach through quantitative easing, causing the safe-haven asset to weaken across the board.
USD/JPY Price Chart
USD/CHF
The market is reflecting bullish signals for this currency pair. The US Dollar is being supported by strong market expectations for US CPI data, despite prospects of the Swiss National Bank turning hawkish.
USD/CHF Price Chart
Sources: finance.yahoo.com, pounsterlinglive.com, dailyfx.com
