The dollar has corrected slightly lower ahead of Thursday’s New York open with some immediate easing of pressure to cover short positions, although tensions remain high.
Sterling came under further selling pressure in early Europe on Thursday with GBP/USD dipping to 1-month lows just below 1.3900 as EUR/GBP tested resistance at 0.8750.
Previous reading -8 Retailers expect a recovery to 25 for May Motor traders index at -16 GBP/USD maintains corrective recovery from 1-month lows, trades at 1.3940 EUR/GBP trades slightly lower at 0.8735
Although the US dollar has lost some momentum, in line with a limited retreat in US bond yields, the Australian dollar has remained on the defensive with AUD/USD trading around 0.7565 from lows of 0.7552 recorded during Wednesday’s New York session.
After sliding to lows of 1.2160 during Wednesday’s New York session and close to 3-month lows, EUR/USD edged higher in early Europe on Thursday as markets waited for the latest ECB policy statement.
Australian financial markets were closed on Wednesday for the Anzac holiday which undermined liquidity, although global trends dominated the Australian dollar.
The Swiss franc has remained on the defensive during Wednesday with EUR/CHF advancing back to near the key 1.2000 level with a 1.1997 high.
In comments on Wednesday, Brexit Secretary Davis made optimistic noises surrounding talks with the EU and remained confident over a free-trade deal, although markets remained sceptical over the Irish border issue which is liable to remain a key stumbling block for negotiations over the next few weeks.
Although there has been an element of optimism surrounding NAFTA talks during the past 24 hours, the Canadian dollar has been unable to resist downward pressure.