USD, GBP flows: Mostly rangy, GBP may see some volatility
USD remains mostly range bound. GBP in focus as MPC members speak
It’s a mixed but mostly rangy picture in the FX market this morning. The AUD gained a little after the Q2 GDP data came in stronger than expected overnight, but has subsequently fallen back and is opening in Europe little changed from last night’s close. USD/JPY retested yesterday’s highs just below 149 in Asian trading, but has fallen back to 148.50 at the European open, while EUR/USD has started a little firmer but remain in the middle of the well established 1.16-1.17 range. EUR/GBP remains near the top of its recent range at 0.87, and has potential for some volatility today with several MPC members set to speak. Mann and Breeden are due this morning, while Taylor, Greene and Lombardelli are due this afternoon. We see the risks as biased towards EUR/GBP slipping lower.
Scandi strength has been notable in the last few days, with EUR/SEK dipping below 11 and EUR/NOK backing away from the highs above 12. NOK/SEK continues to hover near 0.94, but we continue to see more scope for NOK than SEK gains.
