CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Daily Market Report: EURUSD, GBPUSD, USDJPY

Yen outperforms as yields plummet, pound lags following bearish BoE Carney comments.

EURUSD: Yields continue to plummet as both EUR and USD underperform

Little difference in the pair’s price as both euro and greenback underperformed yesterday against most of the remaining FX majors, though plenty of intraday movement following midday reports of ECB policymakers being in no rush for a July rate cut. Otherwise, the plummet in yields was most noticeable, with US yields dropping to two-year lows and German yields plunging further into record negative territory. In terms of the ECB, Lagarde was nominated to lead the ECB as other top jobs were filled after a marathon session, with parliamentary approval needed. In the meantime, today’s service PMI figures are the main item to look out for following Monday’s disappointing manufacturing PMIs, while on the US side ISM’s non-manufacturing and ADP’s estimate will be released prior to Friday’s NFP.

GBPUSD: Bearish BoE comments and negative data keep the pound lagging against its FX peers

The pound lagged the most yesterday as the BoE’s Carney highlighted Brexit and trade risks, and took market probabilities of a rate cut out of the UK central bank higher despite inflationary risks. Furthermore, construction PMI was well below expectations at 43.1 and at lows unseen since 2009. Services data is set to be released today, and as it stands the previous PMI figures this week have both disappointed and contracted. The recent fundamental outlook has been in line with its current bear trend technical overview where most of its indicators are bearish and combined with a trending ADX, reducing the likelihood of its technical overview being undone. In terms of bias, retail sentiment has risen 5% on short profit-taking to an extreme long 78%.

USDJPY: Yen outperforms while the greenback lags as US yields move lower

The yen was the top performer amongst the FX majors yesterday as US yields dropped, with the latter taking the greenback with it against most of the remaining FX majors. While a 0.25% rate cut is fully priced in for the end of July, the probability of a 0.5% cut is starting to rise slightly according to Fed Fund Futures, with that likelihood rising further if US data such as this Friday’s NFP disappoints further. From a technical standpoint, the recent drop breathed some life into its stalling bear trend technical overview, and the mid to long-term outlook remains more bearish but holding at a mid-term support level. In terms of bias, while institutional yen shorts are closing out and taking majority long bias lower, retail bias is ticking higher instead as shorts take profit and longs hold on.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.