The Yen attracted safe haven flows despite disappointing household spending data. The focus turned to the US CPI data and BoE decision for more moves in the market. Gloomy Chinese data revived concerns about the global recovery.
EURUSD traded cautiously as investors stayed on the sidelines in European trade. The dollar kept slight gains ahead of the US CPI data due on Wednesday. Headline inflation is anticipated to remain at 5.0% in April while the month-on-month reading is set to be higher at 0.4%.
The Euro consolidated as traders await the Consumer Price Index from one of Europe’s biggest economies, Germany, which is set to have cooled off in April. The pair lost -0.26% below the 1.1000 level as the slide may reclaim 1.0950 and 1.0900.
GBPJPY tumbled by -0.17% as investors bid on the Japanese Yen amid risk-off flows. Market participants look forward to the Bank of England’s interest rate decision due on Thursday with expectations lying at a 25bps increase. The decision comes after inflation in the UK proved stubborn by staying in double digits.
Sterling’s slump may be capped by BoE-BoJ policy divergence. The pair tanked from an intraday resistance at 170.50 as bears may retest 169.50. However, a continuation to the upside may face a hurdle at 172.00.
European stocks traded lower after disappointing UK housing data. The UK 100 sank -0.68% past the 7800 mark as sellers may target 7700 in the short term. CAC40 lost -0.95% after bulls got rejected at 7435. Further down bears may reclaim 7300. DAX was down -0.29% below 16 000.
US stock futures went south ahead of the US inflation data. US100 futures lost -0.26% trading between 13280 and 13220. US500 futures were down -0.30% as they consolidated between 4140 and 4120 as bears may revisit 4100. US 30 futures slumped -0.32% after establishing a high at 33600. An extended dip may give sellers 33250.
Elsewhere, gold scooped some gains as the US inflation data looms. The non-yielding metal attracted buying amid a low-risk appetite on the day. XAUUSD rose +0.54% from $2020 as buyers may soar towards $2050.