The greenback moved higher after Fed Chairman Ben Bernanke issued another concern on long-term inflation. Swiss CPI rose to 2.9% y/y, coming out higher than expectations (2.4%), the highest figure in fourteen years. Today, we look forward to the ECB and BoE decisions.
News and Events:
The dollar continued strengthening against the Euro and British Pound in yesterday’s American session, pushing the EURUSD to 1.5385 and GBPUSD to 1.9507. These levels are 635points and 1,654points off their all-time highs, respectively. The greenback moved higher after Fed Chairman Ben Bernanke issued another concern on long-term inflation and solidified his stance of fully monitoring price stability more than any other issue. ISM non-manufacturing came out at no-change, 51.7, and the ADP employment report beat expectations, coming out at a gain of 40k jobs. Today, we look forward to the two central bank decisions, as well as US jobless claims due at 12.330h GMT.
Swiss CPI rose to 2.9% y/y, coming out higher than expectations (2.4%), the highest figure in fourteen years. Economists point to rising energy, housing and transport costs. Swiss economic growth outlook remains positive.
Today's Key Issues (time in GMT):
10:00 EUR German Factory Orders s.a. (MoM) (APR) 0.4% vs -0.6%
10:00 EUR German Factory Orders n.s.a. (YoY) (APR) 6.4% vs -5.0%
11:00 GBP Bank of England Rate Decision 5.00% vs 5.00%
11:45 EUR European Central Bank Rate Decision 4.00% vs 4.00%
12:30 USD Initial Jobless Claims (MAY 31) 370K vs 372K
12:30 USD Continuing Claims (MAY 24)
12:30 CAD Building Permits (MoM) (APR) 0.7% vs -4.5%
14:00 CAD Ivey Purchasing Managers Index (MAY) 58.0 vs 57.6
16:00 USD Philadelphia Fed's Plosser Speaks on Financial Stability in NY
17:30 USD ICSC Chain Store Sales (YoY) (MAY)
The Risk Today:
EurUsd: hit our target of 1.5393 and a low of just 1.5385. As we expected, a small bounce of that support level. A close below 1.5363 will open the door to 1.5282.
GbpUsd: continuing its medium-term downtrend and targeting 1.9364. A break above 1.9974 would threaten the bearish bias.
UsdJpy: Next stop is 105.88 (currently trading at 105.83). This is a major resistance level, and once broken, 106.51 will come very easily. On the downside, support holds firm at 104.55.
UsdChf: The target is 1.0610. Strong support holds all the way down to 1.0216
Resistance and Support:
By James Brandt - ACM Advanced Currency Markets, Geneva, Switzerland
ECB and BoE Decisions Due; Investors Focus On Commentary
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