The US dollar was the strongest currency today as hawkish speeches from the FED members and lack of economic data helped the currency to regain its ground. Meanhwile, the British Pound collapsed on dovish speech from Mark Carney and was the weakest currency among G10.

One could say that this week is decisively dominated by central banks’ speakers. We got first remarks from FED’s Dudley yesterday which shored up the greenback and US yields as well. Charles Evans was another FOMC member that spoke on the economy and confirmed that the latter is doing quite well. The US dollar has been adding to recent gains today and is currently showing strong rises against several of its peers. Only the Swiss Franc and New Zealand dollar are gaining against the buck with the majority of currencies moving lower.  

The pound fell after the Bank of England governor said he did not think that now was the time for interest rates to rise. Mark Carney’s comments came in his Mansion House speech, and sterling fell 0.4%in response. Overall, the message could be considered clearly negative for GBP. What’s more, some rumours indicated that a rating cut is likely from the S&P, which added to pound’s weakness. With some live on the greenback the pair could be bound to test a lower limit in a recent consolidation and a break lower could pave the way towards 1.25. Do notice that despite a loss of majority for the Tories, the pair is yet to test a local low of 1.2515 from before the elections announcement.

US indices marked a pretty stellar session yesterday with the NASDAQ (US100 on xStation5) leading gains. The technological index rose by as much as 1.42%. Moreover, the S&P500 (US500) climbed by 0.83% while the Dow Jones (US30) rose by 0.68%. These upbeat moods impacted Asian indices as well which, in turn, affected the opening on European bourses. 

The latest results from the Global Dairy Trade auction have seen a decline in the benchmark for milk price for the first time since early March. Whilst the decline was only 0.8% it does suggest that the strong increases seen in April and May have now given way with the New Zealand dollar making impressive gains lately the decline could threaten the rally.  What’s more, the upcoming RBNZ meeting could also be a negative event for the NZD.

Brent Oil has taken another leg lower today with the market falling to levels not seen since mid November. There’s no major catalysts for the decline although comments from Russia that it has no plans to meet with US oil shale producers are certainly not doing oil bulls any favours.  Brent has now made a clean break below prior support at 46.62 and price is currently trading below the level it was when OPEC first agreed to cut production at the end of last November (marked OPEC I). 

In the upcoming hours it’s worth looking at the API report that could push oil even lower as well as on the Westpac leading index from Australia.