FX Brief: EUR breaks lower ahead of ECB
Fawad Razaqzada July 23, 2019 4:35 PM
A summary of news and snapshot of moves ahead of the US session.
- NZD still bottom of the FX leader board this late in the European session, followed closely by the EUR, while USD and JPY have been the strongest.
- NZD fell after the RBNZ said it was investigating the possibility of using unconventional policy strategy, though it is still at a "very early stage." GBP barely reacted to the expected news of Boris Johnson winning the Tory leadership race today, although the EUR/GBP and EUR/JPY both fell as investors looked forward to the ECB rate decision on Thursday. USD found support from news of a bipartisan deal to suspend the US debt ceiling and boost spending levels for two years.
- The EUR/USD broke below the 1.12 handle this morning, as we had highlighted the possibility on a number of occasions, most recently HERE. Participants trading the EUR/USD are now looking ahead to the upcoming European Central Bank meeting on Thursday. In addition, fresh Eurozone PMIs will be published Wednesday and German Ifo will come in on Thursday morning. Meanwhile from the US, we will have the first estimate of second quarter GDP on Friday, ahead of the FOMC meeting is next week.
- Stocks jumped in Europe in anticipation of a dovish ECB, and on the back of forecasting-beating earnings from the likes of UBS and Banco Santander. In the US, shares in Coca-Cola hit a fresh record thanks to a 6% rise in sales, while Beyond Meat continued to defy gravity as it extended its post-IPO surge to more than 730%, breaking the $200-a-share threshold for the first time. Boeing and Facebook report tomorrow.
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