Fed officials strengthened expectations for the Fed to cut rates in its July meeting. As a result, the USD dropped significantly yesterday. NY Fed President John Williams mentioned that the Fed may take pre-emptive measures, which was interpreted as a dovish signal.

Michel Barnier mentioned that he is ready to work on alternative arrangements for the Irish border. As a result the pound registered a strong up move during yesterday’s session. Also, the UK parliament voted to block the new Prime Minister from having the possibility of closing the UK Parliament in order to pass a no-deal Brexit.

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Other economic highlights, today and early tomorrow

Today, during the European session, we get Germany’s PPI rate for June. In the American session, we get Canada’s retail sales growth rates for May and from the US the preliminary University of Michigan consumer sentiment for July, as well as the Baker Hughes active oil rig count. Please note that today, St Louis Fed President Bullard, Boston Fed President Rosengren and BoJ Governor Kuroda are scheduled to speak. Given the recent volatility, we expect market participants to be closely watching the scheduled speeches.

EUR/USD H4

GBP/USD H4

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