USD has weakened again over the European morning today with the USD index trading 95.64 last, trading back under the 95.72 level. US data over the week has continued to disappoint with durable goods, trade balance data and GDP all coming in below expectations. This latest batch of weak data has underpinned expectations for Fed easing, keeping USD weighed to the downside. Looking ahead today, the final US data for the week is PCE which is expected to print 1.6%.
Eurozone CPI Better Than Expected
EURUSD traded a little higher this morning, boosted by USD weakness and better than expected domestic data. Eurozone CPI for June printed 1.1% on the core reading vs 1% expected. While this reading is still a long way off the ECB’s 2% target, the good news is still welcomed for the troubled eurozone. EURUSD trades 1.1384 last, turning back towards the 1.1440 level.
GBP Remains Weak
GBPUSD has traded a little lower over the early European session on Friday. The final Q1 GDP print came in unchanged. However, a series of business investment readings came in below expectations. For now, Brexit uncertainty remains the key aspect keeping GBPUSD price action constricted with the pair trading 1.2680 last.
Risk Appetite Remains Buoyant
Risk assets have continued their recovery this morning with the SPX500 trading 2934.13 last. Softer than expected US data over the week has boosted expectations of forthcoming Fed easing, keeping equities supported. For now, the market is shifting its focus away from tensions between the US and Iran as we have yet to see any further developments in that narrative.
Safe Havens Weaker
Safe havens have both been lower today in light of the recovery in risk appetite. USDJPY sits atop the 107.65 level, though we have seen some steady retracement lower over recent days due to USD weakness. XAUUSD trades 1413.96 last with price remaining below the 1432.21 level following an initial break above the level earlier in the week. Gold prices remain supported in the near term as lingering geopolitical tensions and weak US data keep safe haven flow alive.
Crude Supported As Oil Inventories Fall Again
Oil prices have been broadly unchanged today, following moves in both directions. Yesterday saw the release of yet another bullish EIA report with US crude inventories falling by a massive 12.8 million barrels, marking their biggest weekly decline since September 2016. Oil prices continued to be supported by the ongoing tensions between the US and Iran though for now, the input from that has faded somewhat. Crude trades 59.21 last with price currently capped by the 59.92 resistance level touched earlier in the week.
AUD Breaks .70
USDCAD has seen very subdued price action so far today with momentum having dried up heavily over recent sessions. USD weakness and higher oil prices are keeping sentiment skewed to the downside. US and Canadian data due later today will have the final say for the week, with price trading 1.3099 last.
AUDUSD has softened a little over early trading today following the break above the .70 level yesterday. The recovery in AUDUSD has been steady, despite RBA easing and expectations of further cuts. The weakness in USD and higher prices in gold are keeping AUD supported for now.
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