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Euro firms ahead of ECB forum

Philip McHugh June 27th 2023 - 2 minute read

The euro ticked higher on Monday ahead of the European Central Bank’s (ECB) annual Forum on Central Banking

Meanwhile, trade in the pound is mixed so far this morning, with GBP/EUR flat at €1.1649 and GBP/USD climbing to $1.2743. GBP/CAD is rangebound at CA$1.6723, while GBP/AUD and GBP/NZD slip to AU$1.8996 and NZ$2.0579, respectively.

Looking ahead, will a series of speeches by ECB policymakers be the main focus today?

What’s been happening?

The euro was initially subdued yesterday after data showed German business morale deteriorated more than expected in June.

EUR exchange rates then rebounded through the session as EUR investors braced for the opening of the European Central Bank’s annual Sintra Forum.

The US dollar faced resistance on Monday, with the ‘greenback’ being pressured by a drop in US Treasury yields.

But tempering the currency’s losses was a sense of caution after Russia’s weekend of chaos helped to underpin the US dollar’s safe-haven appeal.

The pound initially got off to a positive start this week, with the currency appearing to benefit from a modest market correction.

However, Sterling had reversed course by the afternoon, with GBP exchange rates falling amid fresh concern over the UK’s economic outlook.

What’s coming up?

In the spotlight today will be a series of speeches by ECB policymakers, including President Christine Lagarde, at the bank’s Sintra Forum.

EUR investors will of course be looking to the members of the ECB’s Governing Council to share their outlook on monetary policy. A broadly hawkish consensus could help to propel the euro higher this morning.

On the other side of the Atlantic, the publication of the latest US durable goods orders release could weigh on the US dollar this afternoon as May’s figures are forecast to show a sharp drop in goods orders. Although any losses may remain limited if market sentiment remains risk-off.

Meanwhile, in the absence of any notable UK economic releases, the pound could struggle to attract support, particularly if GBP investors remain concerned by the UK’s economic trajectory.

Written by
Philip McHugh

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