Forex Daily Recap – Cable Expedited as UK Wages Data Beat EstimatesThe GBP/USD pair stood higher after the release of positive UK Average Earnings data. Overnight New Zealand Q1 Manufacturing Sales data impacted the NZD/USD movements in the initial hours.
The Greenback started trading on Tuesday near 96.73 levels and remained quite flat throughout the day. The Index marked the day’s high near 96.87 levels while day’s low near 96.68 levels. The US Index stood slightly subdued amid Trump’s intervention in the nation’s monetary policy. Trump tweeted today, aiming the Euros and other devalued currencies that the “US Dollar is at a big disadvantage”. This statement came up after the Fed Chief Powell had hinted last week, the probable likelihood of a rate cut. Powell had mentioned that the Bank would take appropriate steps in case of an economic slowdown. The President also added that the Fed interest rates are way too high. Earlier US Presidents had stayed distanced themselves from the Central Bank. However, Trump has broken the precedent set by the former leaders, breaking Fed’s political independence. In the European session, the US Producer Price Index (PPI) came out. The May MoM PPI excluding Food and Energy recorded 2.3% in-line with the market hopes. Anyhow, the PPI figures remain 0.1% lower than the previous 2.4%.
After making the opening near 1.2691 levels, the Cable showcased a small correction that reverted from 1.2670 levels. The pair managed to perform a break-through the healthy resistance level near 1.2725 marks. The upliftment in the GBP/USD pair came after the release of positive Earnings data. UK 3Mo/Yr April Average Earnings excluding Bonus reported 0.3% over the consensus estimates of 3.1%. Also, the crucial UK April ILO Unemployment Rate came in-line with the market estimates of 3.8%.
Traders also witnessed some weak UK data at around 08:30 GMT. The UK May Claimant Count Change recorded 23.2K over 22.9K estimates. However, the Cable shrugged to the Claimant data and kept up the uptrend. Such optimistic results in the middle of uncertain Brexit tensions appeared as a boon to the Cable. Laterwards, weak US PPI data compressed the Greenback gains thereby helping its rival Cable upsurge. At 17:00 GMT, the pair was testing 1.2730 resistance levels but failed to breach it.
The Kiwi pair extended the previous day’s downward rally into today’s trading session. The NZD/USD pair had triggered the downtrend on June 7 near 0.6681 levels. The pair made the opening near 0.6611 levels and continued slipping throughout the day. At around 12:30 GMT, the pair took a break from the downtrend. The pair shifted slightly upwards, breaking the negative trend. The Kiwi pair had found some strong support near 0.6569 levels, marking daily or 5-days low. Overnight New Zealand Q1 Manufacturing Sales data impacted the pair’s movements in the initial hours. The data reported 2% in-line with the consensus estimates as well as the prior figures. The pair was trading near 0.6585 levels at around 17:12 GMT, on track of recovery.
The Euro pair remained higher as investors appeared to shift from the risky US Dollar Index. The fear came after the Trump mentioned Euro in his tweets today.
Trump called Euro as “devalued” and added that the US Dollar is at a big disadvantage here. Meanwhile, Bank of Finland governor and ECB governing council member Olli Rehn reiterated on rate cuts. The Officials also addressed to restart the Quantitative easing soon. The EUR/USD pair managed to mark daily high near 1.1337 levels breaking 1.1333 resistance levels. Technicals showed the uptrend in the pair to continue in the coming sessions.