Global risk appetite appears to have rebounded today with the Dollar weaker across the board, but particularly against developed market currencies and high-yielding market currencies. To be clear the moves have been modest and there is seemingly still a lot of support for a Dollar backed by a red-hot economy and the possibility that US yields will continue to climb. Nordic currencies and the Canadian Dollar are seeing some decent support, which may be partly tied to the rise in crude oil prices and relief that the anti-EU nationalist party in Sweden’s recent general elections did not perform quite as strongly as predicted by opinion polls.
The GBP/USD cross appears to have found its footing just above 1.30 where it has been trading for now three consecutive sessions. Decent weekly labour earnings data for July and somewhat encouraging Brexit headlines are keeping Sterling bid but it may take more than vague EU promises to really move the needle. Senior EU officials have in recent days suggested that they were amenable to moving Brexit negotiations forward in a bid to reach a deal with the British government but there is yet little or no evidence that the EU’s fundamental bargaining position can or will change.
