EUR/USD Sticking Close To The Highs
EUR/USD sticking close to the highs; cross rate demand helping as president Draghi sticks to the script.
The ECB's Draghi is speaking this afternoon, however, he is keeping tight-lipped on any fresh considerations which may be circulating the governing council. He has maintained that economic fundamentals remain solid yet reiterates rate policy will be unchanged over the summer of next year. The governing council retain their confidence that inflation will rise, and this is something that no doubt the lower exchange rate will help in achieving. Naturally, the risks surrounding trade wars and their impact cannot be ignored, as mentioned by fellow member Nowotny and President Draghi this morning.
Note there is little impact on EUR/USD as yet, even though we are up against some significant levels from 1.1800. So far today, the headline rate has been pretty well cushioned on dips, with demand noted below 1.1750. Some of this is clearly coming through the EUR/GBP rate which has again stalled into the low 0.8800's. As much as the GBP euphoria has been stand out this morning, very little of it has been reflected through the cross rate.
Later in the week, the ECB minutes are due for release, and this may reveal some of the broader spread of considerations, which may have a positive effect on the single currency if the timing of the next rate is still up for discussion. Price action has been very tight this afternoon, after some early excitement in the market. We may get a little more movement once the tightly packed London markets dissipates in a few hours. For now, we seem to have a stalemate as the USD remains on the back-foot and EUR/GBP flow fights against the bid in Cable.