The EUR was rocked yesterday as speculation surfaced that French President Emmanuel Macron was set to resign ahead of the French elections. However, these rumours were swiftly refuted. But once again this highlights what we said in yesterday's report that whilst the EUR has a political risk premium attached to it, it will be susceptible to sudden bouts of weakness on negative data or news stories.
GBP was marginally higher across the board despite the morning's data suggesting that the UK job market was cooling.
*Daily move - against G10 rates at 7:30am, 12.06.24
** Indicative rates - interbank rates at 7:30am, 12.06.24
UK GDP for April came in at 0% down from 0.4% in March, suggesting cooling growth in the economy. Market reaction has been muted thus far and the data should have minimal impact on the Bank of England's rate policy.
So all eyes on USD flows today with the CPI report and the Fed Dot Plot in the evening. We had strong job numbers on Friday which saw USD buying across the client base, hedging their bets in case further USD gains. A higher-than-expected CPI reading and a hawkish Fed Dot Plot will likely lead to further USD gains as markets will ease bets on expecting a rate cut this year.
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