Not much has happened with the major currencies over the last 24hrs, for example GBP/USD is within a few pips of where it was at yesterday’s close. Support/ resistance zones have broadly held, and the same could be said for the main US equity markets. USD/JPY and USD/ZAR offer some small variation from this theme, but only in so far as they’ve moved a little bit more than some other notable currencies. USD/JPY has had a minor bounce from its support zone around 101.20ish and is currently at 101.50, meanwhile USD/ZAR has continued to drift lower, but as I said yesterday, the move would only become noteworthy if it goes below 10.53, USDZAR is currently trading at 10.63 within a large corrective complex.
The truth is, currency markets feel a bit stale at present. We have BOE minutes tomorrow which could shed some light on exit strategies, certainly not harmful for GBP! And we have inflation numbers in the US today another data point which could add fresh colour to exit strategy narratives. The market needs more information to propel assets one way or another. Of course a higher than expected inflation number would not be positive for risk markets, quite the opposite in fact. But I’m not expecting that.
For now, we stay in wait and see mode. To see the data, and to observe how the market reacts to it.