The US dollar is buoyant ahead of Thursday’s FOMC meeting where rates are expected to increase to 2.25%. The dollar is out-performing this morning as traders bet on further rate hikes beyond Thursday.
The main highlights include the British pound which is slightly lower this morning after heavy losses on Friday as Brexit talks turn sour. Most of last week’s gains have been wiped out. There is slightly better news on the EUR/GBP which jumped above 0.8950 on Friday and is making small losses this morning. The GBP/JPY crumbled back from the highs on Friday, but is unchanged this morning.
The euro also suffered losses on Friday and this morning, but far more manageable than the pound. The EUR/JPY reversed sharply from the highs of 133.00 on Friday, with smaller losses again this morning.
The Aussie dollar has gapped lower at the open against the dollar, with the AUD/JPY following a similar pattern.
The USD/CAD is also lifting from the 1.2900 level as the dollar regains control, with the USD/CHF also continuing Friday’s rise form the lows.
Today is a public holiday in Japan and China.
At 09.00, we have German Ifo Business Climate.
ECB President Draghi speaks at 14.00.
The EUR/USD is weaker this morning after Friday’s turnaround. The 1.1800 level has been rejected multiple times this year and with the Fed meeting due later in the week, we could see further downside from here.