Forex Analysis

Central European Daily

CE currencies strengthen ahead of ECB meeting Macroeconomic fundamentals remain supportive Yesterday Hungarian and Czech data confirmed that the CE region is recovering.

The summer seeds of a sterling selloff

Today’s Bank of England meeting shouldn’t provide any policy surprises, but things are likely to get more interesting over the summer as a full third of the current MPC are replaced.

The Global Macro Pulse

EURUSD and EUR crosses came under moderate pressures. EURUSD traded just below 1.36; EURGBP, EURSEK and EURNOK were also slightly lower.

FI Eye-Opener: You better not be bluffing, ECB

Longer German bond yields continued to rise yesterday and the curve steepened some more.

EUR/USD Analysis

The pair started the Thursday session at $1.3599 from a NY range of $1.3597-$1.3639 and marked a narrow trading range of $1.3594 to $1.3605 in lacklustre Asia.

FX Daily

Today’s ECB meeting will be the main attraction. We expect the ECB to deliver anaggressive easing move by cutting the refi and deposit rates, taking the latter intonegative territory.

USD/JPY Analysis

JPY stepped into Asia Thursday at Y102.75 from NY’s range of Y102.44-Y102.75, euro-yen opened at Y139.72 with both rates sliding down to

Aussie had a slightly positive day despite a surprise drop in the trade data to post a -A$122 million deficit (MNI Median forecast was a A$300 million surplus), with exports down 1% and imports up 2%.

GBP/USD Analysis

The pair closed in NY Wednesday at $1.6737 after rate had recovered off an intraday low of $1.6699 to $1.6768 on the back of stronger than forecast UK services PMi data,

Citi: ECB Preview

In a note to clients today, CitiFX summarized Market expectations ahead of the ECB with the following scenarios ranked from most to least positive for EUR:

ECB has the potential to surprise

Market movers ahead • Lower inflation in the euro area has also strengthened our expectations that the ECB will deliver an aggressive easing move at Thursday’s meeting.

EUR Mid-day Analysis

Euro zone data overnight was a little weaker than expectations but with the readings still sittingcomfortably above the 50.0 growth/no growth line, the undershoot versus expectations is discounted.