NZD again took the interest with a dip on reports of an earthquake off the South Island, soon recovered but NZD still a poor performer on a quiet day.
EUR/USD has maintained a tight range just tucked under 1.1400, again with no data of note to watch.
USD/JPY has not tested the depth of offers at 114.50, that suggesting the good sized expiry interest at 115.00 today will struggle to attract.
GBP has had a marginally better morning, though upside over 1.29 on Cable proving limited. And EUR/GBP bottoming out well ahead of .8800.
EUR/CHF has extended its better run to as high as 1.1040. Again there has been no obvious sign of the SNB getting involved.
USD/CAD is seeing some short covering, crude taking a mid-morning dip(much like yesterday), while one US investment bank has stirred the pot by suggesting the BoC will keep rates unchanged tomorrow. AUD/USD is holding over .7600, largely with the help of AUD/NZD demand, the cross threatening a run over 1.0550.
EUR/SEK can’t hold a dip below 9.60 and is in danger of a short squeeze into Swedish inflation data on Thursday.
GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)… (0100-QWVQ-C02)
The US week ahead starts quietly, with little of significance on the calendar before Yellen testifies to the House on Wednesday. Yellen has so far stuck to a view that low unemployment will feed into inflation despite recent unexpected softness in the latter so any change in tone would be notable. Yellen will repeat her testimony to the Senate on Thursday, though there will be a separate Q+A.
Recap EMGE Europe
Russian assets weakened at the start of Tuesday’s session with the USD/RUB briefly rising to 60.91 after it breached the 60.65 resistance level and government bond yields increasing by up to 12bps across the curve (source: Reuters), hurt by the broadly stronger US dollar and lower oil prices. We think that the ruble will stay fragile in the near term on the back of a stronger impact of FX purchases by the authorities due to the narrower current account surplus, with the USD/RUB approaching the key 61.40 resistance level.
South African assets weakened at the beginning of Tuesday’s session with the USD/ZAR briefly climbing to 13.6278 after it broke the key 13.584 resistance level and government bond yields rising by 4-11bps across the curve (source: Reuters). They suffered from lower metal prices amid the US dollar’s broad-based appreciation ahead of the US Fed Chair Janet Yellen’s semi-annual testimony on Wednesday and Thursday.