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The greenback shaded some of its Friday gains on Monday as investors embrace risk on the fading sentiment of tightening by the Fed. UK’s Prime Minister and President of the European Commission, Ursula von der Leyen are set to meet on Brexit talks. In New Zealand, consumer spending shrank in the final quarter of 2022.
GBPUSD gained +0.20% ahead of the UK-EU meeting and US data. Rishi Sunak and Ursula von der Leyen are set to meet later Monday to discuss the Brexit deal and the Northern Ireland trade protocol. The update sparked some optimism and lifted the sterling. The dollar reversed gains on Monday after Friday’s rise on stronger-than-expected PCE data. Later on, the US core durable goods orders will be released along with Pending Home Sales. The cable bounced off an eight-week low at 1.1920 and may be challenged by a 1.2000 psychological resistance on the rally.
CADCHF rallied +0.10% on the day ahead of growth data from Canada and Switzerland this week. On Tuesday GDP data from Switzerland is expected to rise while GDP from Canada is anticipated to remain unchanged in December. Later ahead, Statistics Canada will publish the current account for the fourth quarter. The pair is currently capped at 0.6950, a 7-week high while a break above may give bulls 0.7100.
EURNZD surged +0.33% in the aftermath of downbeat economic data from New Zealand. On Sunday New Zealand retail sales data came in less than anticipated at -1.3% vs 0.3% surveyed for the core figures while retail sales [QoQ] Q4 declined to -0.6% vs 0.2% expected. In the Euro area data showed that consumer confidence remained unchanged at -19.0 in February. Looking ahead, ECB’s Philip Lane will be delivering a speech later today. Bulls may be challenged by 1.7200 on an extended rise while bears may seek 1.7100.
European stocks opened the week on a positive note as the market mood brightened with an encouraging Brexit deal update. The DAX in Germany gained +1.36% rising from the 15 200 low. Bulls may need to breach above 15 600 for sustained buying. CAC40 in France was up +1.19% after the bulls defended the 7200 mark. An upside move is still capped by 7400. The FTSE100 rose +0.42% from the 7900 low as 8000 may be a challenge to buyers.
US stock futures edged higher on dollar weakness on the day. The DJIA futures were up +0.50% after establishing a low at 32800. Upside gains are challenged by 33300. S&P 500 futures rose +0.50% trading a few ticks from the 4000 psychological resistance. The Nasdaq100 futures were also up +0.50% as 12200 remains a challenge to the upside. Next on the downside is 11800.
In cryptocurrency, bitcoin traded south as higher inflation data from the US increased bets for more rate hikes from the Fed. BTCUSD was down -0.65% trimming Friday’s rally to 23 650. An extended slide may be challenged by the 22800 low.
