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German Business Confidence and Iran Put the EUR and USD in Focus

Bob Mason
It’s a mixed start to the day as the markets look to gauge what’s next for Iran. Any retaliation to new sanctions will need to be looked out for…

Earlier in the Day:

There were no material stats released through the Asian session this morning to provide the majors with direction.

Market reaction to softer economic indicators out of the U.S, concerns over rising tensions in the Middle East, and sentiment towards this week’s G20 Summit provided direction on the day.

For the Majors

At the time of writing, the Japanese Yen was down by 0.07% to ¥107.39 against the U.S Dollar.

The Aussie Dollar was up by 0.36% to $0.6951, while the Kiwi Dollar was up by 0.05% to $0.6592.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead for the EUR.

Germany’s June IFO Business Climate Index and sub-indexes will provide the EUR with direction later this morning.

Following Germany’s private sector PMI numbers, optimism within the manufacturing sector improved, while service sector optimism slid. While forecasts are EUR negative, improved optimism in the manufacturing sector could limit any downside.

Outside of the stats, geopolitical risk will need to be factored in. In spite of rising tension between the U.S and Iran, Trump’s decision to hold back a military strike should support the EUR on the day.

At the time of writing, the EUR was up by 0.07% to $1.1377.

For the Pound

It’s a quiet day ahead, with no material stats due out of the UK.

With no material stats due out of the UK, the focus will remain on Parliament.

Will there be any fallout from Boris Johnson’s domestic woes? Expect the EU to continue to give their 10 cents worth in a bid to influence the outcome of the leadership race.

Few member states are likely to want Johnson to take the top spot, though an unwillingness to negotiate does suggest that a no deal Brexit is the only option should the Tories hold onto their very limited power.

At the time of writing, the Pound was up by 0.05% to $1.2744.

Across the Pond

It’s a quiet day for the Greenback.

There are no material stats due out of the U.S.

The Greenback has taken a hiding in recent days and barring the threat of military action against Iran, a lack of stats today will limit any upside.

Any positive chatter ahead of the Trump – Xi G20 Summit meet would be Dollar positive. It would be unusual, however, if past performance has anything to go by. The U.S President tends to favor threatening remarks ahead of any meetings.

At the time of writing, the Dollar Spot Index was down by 0.07% to 96.153.

For the Loonie

There are no material stats due out of Canada.

Market sentiment towards the U.S – Iran relations, or lack of, will likely be the key driver on the day.

It’s a busy week ahead for the Loonie, but there are also a number of possible curveballs for the markets to consider.

The Loonie was up by 0.20% to C$1.3196, against the U.S Dollar, at the time of writing.

This article was originally posted on FX Empire

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