Sterling was able to make a slight recovery on Monday as a positive market sentiment helped the currency to rise. The Dollar naturally “stayed under modest bearish pressure on Monday and weakened against its rivals with the risk-positive market environment making it difficult for the currency to find demand”. The US Dollar Index has continued to push lower as we head into Tuesday – trading below 94.00 for the first time since the Fed’s policy announcements last week. The Greenback made losses against both Sterling and Euro yesterday.
After starting the week at 1.3486, GBPUSD advanced to beyond the 1.35 handle on the day, closing the session at 1.3563.
GBPEUR also made impressive gains on Monday. The pair opened the day at 1.1654 and closed at 1.1702.
Tuesday is an important date in the European calendar. At 07:00 Germany’s Balance of Trade came in as forecasted, printing a figure of €13.2B. Following that release at 10:00 the ZEW Economic Sentiment and ZEW Current Conditions are released. Economic Sentiment smashed expectations of 20 by coming in at 31.7. Current Conditions in contrast missed forecast, coming in at 12.5 despite being expected at 18. ZEW Economic Sentiment was also released for the Eurozone as whole at 10:00. With a previous of 21, the final reading for November came in at 25.9. At 13:00 ECB President Christine Lagarde will be giving a speech.
EURUSD has been able to slowly approach the 1.16 handle amid “overall Dollar weakness”. On Monday, EURUSD opened the session at 1.1572 and closed only 10 pips off 1.1600 at 1.1590.
In the afternoon from the US, at 12:50 Fed member Bullard will be speaking. At 13:30 US PPI MoM will be released, forecasted to come in at 0.6%. Then from 14:00 there will be speeches from Fed Chair Powell, and Fed members Daly and Kashkari.