INTERNATIONAL CURRENCY BUZZ
Forex – US Dollar Digestion Comes Back Ahead of US Inflation
Forex – GBP/USD spikes and retreats, back below 1.2900 handle
Forex – EUR/USD stays below 1.1600 post-US data
The single currency keeps the negative ground so far today and is now prompting EUR/USD to navigate within the daily range below the 1.1600 milestone. The pair remained apathetic despite today’s US docket came in on a mixed tone. In fact, US Producer Prices came in flat on a monthly basis during July and rose 3.3% over the last twelve months. Prices excluding energy and food costs gained 0.1% inter-month and 2.7% on a yearly basis. Further US releases saw Initial Claims rising 213K WoW, bettering estimates and taking the 4-week Average to 214.25K from 214.75K. In the meantime, spot is looking to consolidate after failing to break above the 1.1630 region earlier in the week. The inability to move further north of this area could originate some consolidation in the near term with the likelihood of a deeper retracement afterwards.
The GBP/USD pair reversed an early dip to fresh 11-month lows and spiked beyond the 1.2900 handle in the last hour, albeit quickly retreated around 20-25 pips. Incoming Brexit headlines continue to play a key role in driving the sentiment surrounding the British Pound, with some positive Brexit development helping the pair to stage a goodish rebound from an intraday low level of 1.2942. According to a report, via the Business Insider, the EU member states are reportedly willing to consider a Brexit deal, which will allow Britain to remain in the single market for goods while opting out of the free movement of people. The news provided a minor boost to the British Pound and prompted some short-covering move from a support marked by a downward sloping descending trend-channel formation on the daily chart. The uptick, however, lacked any strong follow-through as investors believed that any such deal is likely to get rejected in the UK Parliament as it will limit the country’s ability to strike a new free trade deal.