Most Asian stocks pushed higher to begin the week, despite a tumultuous G7 meeting at the weekend, with President Trump claiming that he would instruct US representatives not to endorse the G7 communiqué.
CAD weakened on the open further to a dispute between US President Trump and Prime Minister Justin Trudeau.
Focus will now turn to the historic summit between President Trump and North Korean leader Kim Jong Un in Singapore on Tuesday.
Also over the weekend, the Italian Finance minister stated that there was no discussion of leaving the euro in an interview with Corriere Della Sera, which has provided support for EUR.
Investors will watch for the ECB meeting on Thursday, where Barclays Research expect that the ECB will discuss the end of asset purchases, but won’t communicate its decision until the July policy meeting. The bar for a hawkish ECB surprise is now arguably higher following last week’s communication.
In EURUSD 1.1715 the short term level to the downside and 1.1830/50 key resistance to the topside ahead of the key 1.2000/ 1.2011 (200 dma).
In the US, while a 25bp Fed rate hike is widely expected, Fed communication and projections could still move markets. The median forecast of three rate hikes in 2018 will likely remain unchanged, but the risk that it moves higher, to show four hikes, is high. The occurrence of this may be perceived as modestly hawkish, benefiting the USD somewhat.
In the UK, Barclays Research expect this week’s plethora of data (inflation, labour market and retail sales) to disappoint relative to consensus and therefore expect GBP to underperform.