The US dollar index is on the back foot, continuing Friday’s turnaround as the week starts with positive global sentiment. China Caixin PMI rose more than expected as the Chinese economy defies expectations.
The AUD/USD has jumped higher, gapping above the 0.7100 level as trader bet on China’s positivity boosting its trading partners.
The EUR/USD has also gapped higher, interrupting last week’s bear trend that had pushed the pair towards the 1.1200 level. Instead, the 1.1250 is set to be challenged. The GBP/USD is also performing well as the 1.3000 support level held last week despite Brexit complications. The EUR/GBP gapped higher at the open, but is slipping back towards the unchanged level.
The USD/CAD slipped back to support around 1.3350 on Friday, but is holding unchanged this morning. By contrast the, USD/CHF continues to make erratic gains and holding above 0.9950.
The USD/JPY has gapped higher, continuing last week’s moves and holding above 111.00. The AUD/JPY is taking a starring role, trading above support at 79.00. The GBP/JPY and EUR/JPY continue to rise after gapping higher.
Today, we have UK Manufacturing PMI at 08.30.
At 09.00, we have EU CPI flash estimate.
US retail sales are at 12.30.
US ISM Manufacturing PMI is at 14.00.
BOC governor Poloz speaks at 18.55.
The EUR/JPY has gapped higher this morning, but the longer term trend still has a negative edge. The yen pairs have a positive edge this morning, but still remain vulnerable. The euro in particular has risks with Turkey wobbling.