Yesterday’s big mover was the British Pound which after a slight dip, surged to multi month highs across the board after the UK Prime minster, May, called for a general election to take place on June 8th. The surprise announcement has markets positive on the future of the UK as traders price in a potential reversal of the Brexit vote. The GBPUSD tripped several stops to the upside as we saw 1.2900 being challenged, taking the daily gain on the pair to just under 400 pips from the day’s lows. The pound will remain sensitive to ongoing negotiations regarding Brexit and as various parties come ahead in the polls.
Elsewhere, the EUR strengthened as Germany’s finance ministry called for an increase in rates, sighting that this might lower the current account surplus. Today’s release of the Final CPI y/y might see further upside in the EUR if we see a beat of expectations while a worse than expected release will see the EUR soften.
In commodities, we saw subdued trading with gold bulls managing to overcome initial weakness to close higher but an intensifying battle rages as both bulls and bears look to dominate. As it stands bulls will look to hold the 1280 level in hopes of breaking the all-important 1300 handle while bears will seek to retest the key 1250 level. In crude oil, we saw the commodity soften ahead of today’s US Crude Oil Inventories which will lead to an increase the price of Crude oil if it comes in lower than expected or a decrease in the price of crude oil if it comes in higher than expected.
Other major events to look out for today are speeches by the Fed`s George and Rosengren along with the ECB`s Coeure. If either strike a hawkish tone, we would see their respective currencies strengthen or vice versa on more dovish sentiment.