The pound waits for the BoE inflation report

Today’s volatility will most likely come from the inflation report hearings from the Bank of England’s Governor Carney. These can be long meetings, normally 1 – 2 hours of talking to the treasury committee, so a lot to listen out for especially parts on currency market, rate hikes and growth.  Expected to make a mark in the GBP, dependent on how they see the economy going forward, any signs that a hike in interest rates is not on the table could keep the pressure back on the pound.  Currently trading weak against the USD just below the 1.5700 level.

USD/JPY is having a very choppy week after falls from seven-year highs, it seems to not be able to gain above the 118 level.  BoJ’s Kuroda was speaking last night and reiterates the stance on beating deflation and is ready to do more if needed, he also comments that he is unfazed by the yen falls.  Currently USD/JPY is on the 118 level, falling below after Kuroda’s comments as we start to see some profit-taking and a possible overdone drop in the yen for the time being.

The Aussie and Kiwi have extended their falls overnight as USD starts to regain control. This morning the RBA deputy Governor Lowe will be speaking and this can cause some volatility for the AUD. The RBA generally likes to point out the very high AUD exchange rate and could pile on more pressure.  Currently trading just below the 0.8600 level.

The euro has been fighting back after its fall on Friday from Draghi’s dovish outlook but is back under pressure today from the USD.  Currently trading just above 1.2400, with no data out today in the Eurozone to help support it, it will come under pressure from US data out today.  Preliminary GDP from the US is set to be released at an expected 3.3% from 3.5%, a slight drop here as expected might weaken the dollar run. But an expected rise in consumer confidence up to 95.9 from a previous 94.5 could keep USD on its bull run.

EUR/USD

Supports 1.2390 1.2350 1.2330  | Resistance 1.2460-1.2510-1.2575

USD/JPY

Supports 117.90 117.40 117.10| Resistance 118.80 119.10 119.65

GBP/USD

Supports 1.5645 1.5595 1.5560  | Resistance 1.5730 1.5765 1.5820