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Weak US Data Prompts Dollar Pullback, GBP & MXN Outperform

FOREX
  • The USD index slipped to the lowest level since April 12 on the back of US PMI data releases - with the step lower in the US yields reflecting the poorer-than-expected data. Bolstered risk sentiment filtered through to a strong bid for equities, which in turn benefitted the likes of EUR, AUD and NZD.
  • EURUSD's rally puts the pair back at the prior support level around 1.0700, and will likely place pressure on fresh shorts that had been accumulated in recent sessions.
  • GBPUSD outperforms having already risen to the best levels of the session ahead of the US data, helped by a moderate turn lower for the broader USD index and slightly more hawkish comments from Bank of England’s Pill.
  • Price action after the US PMIs extended the bounce from yesterday’s five-month lows to around 150 pips, with cable consolidating around 1.2450 ahead of the APAC crossover. Overall, the trend condition in GBPUSD remains bearish and moving average studies are in a bear-mode set-up, reinforcing a bearish theme. Sights are on 1.2266, the Nov 14 2023 low. Initial firm resistance comes down to 1.2524, the 20-day EMA.
  • The renewed sensitivity to moves in US yields and broader risk sentiment in recent sessions has bolstered the Mexican peso on Tuesday, which outperforms in the EM FX space. USDMXN (-0.80%) has slipped back below the 17.00 handle, briefly printing a low of 16.9717.
  • Australia CPI highlights Wednesday’s docket overnight, before German IFO, Canada retail sales and US durable goods are scheduled. Focus will then turn to US GDP figures due Thursday.
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  • The USD index slipped to the lowest level since April 12 on the back of US PMI data releases - with the step lower in the US yields reflecting the poorer-than-expected data. Bolstered risk sentiment filtered through to a strong bid for equities, which in turn benefitted the likes of EUR, AUD and NZD.
  • EURUSD's rally puts the pair back at the prior support level around 1.0700, and will likely place pressure on fresh shorts that had been accumulated in recent sessions.
  • GBPUSD outperforms having already risen to the best levels of the session ahead of the US data, helped by a moderate turn lower for the broader USD index and slightly more hawkish comments from Bank of England’s Pill.
  • Price action after the US PMIs extended the bounce from yesterday’s five-month lows to around 150 pips, with cable consolidating around 1.2450 ahead of the APAC crossover. Overall, the trend condition in GBPUSD remains bearish and moving average studies are in a bear-mode set-up, reinforcing a bearish theme. Sights are on 1.2266, the Nov 14 2023 low. Initial firm resistance comes down to 1.2524, the 20-day EMA.
  • The renewed sensitivity to moves in US yields and broader risk sentiment in recent sessions has bolstered the Mexican peso on Tuesday, which outperforms in the EM FX space. USDMXN (-0.80%) has slipped back below the 17.00 handle, briefly printing a low of 16.9717.
  • Australia CPI highlights Wednesday’s docket overnight, before German IFO, Canada retail sales and US durable goods are scheduled. Focus will then turn to US GDP figures due Thursday.