In the FX, the US dollar index slipped below the 97 mark.
The EURUSD sees firm support on the back of a solid risk appetite and signs of compromise from the frugal four on the proposed 750-billion-euro fiscal rescue package before the July 9 Eurogroup meeting. The latest CFTC data confirms a persistent increase in net speculative long positions in euro on the back of a rising conviction in euro pairs, including the EURUSD, the EURJPY and the EURGBP. If supported by solid economic data, the single currency should make an attempt on June high, 1.1423.
Released this morning, the German factory orders improved 10.4% in May, lower than 15% expected by analysts. Due later today, the European retail sales may have rebounded 15% in May, following more than 11.7% in the previous two months.
Tomorrow, German industrial production data should print a swift rebound in May. Moving forward, we know that German car manufacturers ramped up production by 80% in June. Though the intimidating figures are mostly due to the very low activity in previous months and remain below normal levels, the signs of pickup are encouraging for growth prospects, and the euro.
Cable is preparing to fight back offers above the 1.25 mark. The sterling remains bid against a broadly softer US dollar but offered against the single currency. Last week’s Brexit negotiations ended on a familiar note of non-progress on the back of severe divide between the two parties. Hence, price advances in sterling continue providing interesting top-selling opportunities for the medium-term bears as the UK walks firmly towards a no-deal Brexit.
Elsewhere, the antipodeans are better bid on solid risk sentiment. The USDCAD is back below its 200-day moving average (1.3545) although gains in Loonie could tip backwards on the back of stagnating oil prices, and the rising possibility of a downside correction in oil markets.
