In the FX complex,the positive risk tone sees CHF fall to the bottom of the pack, with JPY also pressured across the board. Consequently, EURCHF has reclaimed the 1.1000 handle as USDCHF looks for a test of yestrday’s high.
Indeed, USD remains well supported across the board, leading the FX majors to the upside with DXY trading back above the 91.00 handle and looking to pare all of yesterday’s weakness. Commenting on USD, Reuters noted: “The dollar drifted higher in the Asia session on Tuesday, pausing a monthlong decline as investors weigh whether a roaring U.S. economic recovery may force interest rates higher and are looking to upcoming economic data and policy speeches for clues.”
Another currency of note is AUD following the RBA’s May policy announcement. As expected, remained unchanged with the cash rate and 3yr yield target at 0.10%. The response from analysts has been mixed, with the focus failing on sharp revisions higher to the central bank’s economic forecasts, but still no policy tightening expected until at least 2024. Consequently, AUD trades mixed against its major peers .
Looking to the sessions ahead, the only data of note in today’s european trading session will be the UK’s manufacturing PMI report which is expected to be confirmed at a healthy 60.7.