Markets will have to wait for Powell and FOMC minutes tomorrow for fresh direction
It has been another day when the USD has been on the front foot, posting gains across the board as better employment data seen at the end of last week has maintained the positive tone so far this week. Earlier today, we had a prepared speech by Fed chair Powell, but he did not cover any monetary policy and this was perhaps to be expected ahead of his testimony in front of the Senate Banking Committee tomorrow.
We also have the Fed minutes to contend with tomorrow evening, so we may start to see the market try and ease off some of the aggressive pushing we have seen today, though GBP has been the primary target and this may continue into the North American session.
Cable went on to hit lows just under 1.2440, and given these are significant levels - the lows seen at the start of the year, we may continue to push for stops here, though EUR/GBP buyers have also come up against some selling interest at 0.9000 so it may be hard to extend here until the next risk event - which comes in the form of UK data out tomorrow morning.
Elsewhere, we saw a dip below 1.1200 in EUR/USD, but this has proved short-lived as yet, and the USD is the major driver here so once again, we wait on events tomorrow afternoon/evening.
USD/JPY is also likely to hold the upper 108.00's for now, with US stock markets back to flat on the day and long end YS Treasury yields having recovered a little - US 10yr is back above 2.00%.
AUD also took a hit late in the day, but we saw little behind this, and USD/CAD is still trying to push above 1.3135-45, but we have the BoC meeting tomorrow, so there is major event risk here to look to also.
So after a USD centric start to the week, we may see a little more 2-way action from tomorrow, but the clear losers on the day were GBP and AUD, so we now watch to see where the market takes things from here.