Forex Analysis for Thursday 18th May 2017
In the UK, Average Earnings came in on target at 2.4%, which is below the current CPI of 2.7% reported on Tuesday.
The unravelling of the Trump trade continues. The USD is down, all 3 US equity indices gap down and move down significantly. Gold moves up, US 10 Year yields gap down and drop and the JPY strengthens. The Fedwatch tool sees the chance of a June Fed hike receeding, although still above 50%. If that’s not risk-off I do not know what is. Global stocks follow the US down. The EUR rise seems over and the GBP declines. The commodity currencies all drop to support.
It is worth noting that at the time of writing (0830 am BST), there are signs that the risk sentiment is turning more positive.
JPY Preliminary GDP, GBP Retail Sales.
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