Tensions in the Korean peninsula increased yesterday on reports of North Korea moving an inter continental ballistic missile close to its West coast. Markets are cautious at the moment, but are yet to reach full blown panic stations. Hopes are high that diplomacy can still prevail.
The yen pairs are lower today after a mixed day yesterday. The USD/JPY posted moderate rebound gains, but is lower again this morning. Meanwhile, the GBP/JPY is continuing its down trend with two straight losses this week.
The dollar pairs are mixed, with the AUD/USD out performing this morning compared to its peers. The GBP/USD and EUR/USD are flat by contrast. Meanwhile the Canadian dollar has continued its fine run, making gains against the US dollar this morning.
The EUR/GBP is making moderate gains this morning after strong gains yesterday.
Meanwhile gold is holding at the highs as tensions drive interest in haven assets.
Coming up today, we have UK services PMI at 09.30.
This is followed by a speech from RBA governor Lowe at 10.10. FOMC member Brainard speaks at 13.00.
At 15.00, we get US factory orders.
FOMC member Kashkari speaks at 18.10, with Kaplan speaking at 23.05.
The Canadian dollar continues to perform well on oil prices stabilising around $50. By contrast, Brexit continues to act as a dead weight on the pound.
The GBP/CAD continues to drop lower as a consequence and there could be further to come.