FX Action: The dollar and yen have continued to underperform
FX Action: The dollar and yen have continued to underperform most other currencies amid a backdrop of rallying global stock markets, which has seen new record highs scaled on Wall Street and the MSCI Asia-Pacific (ex Japan) index rise by over 0.5% today. EUR-USD posted a fresh two-month high at 117.87, while EUR-JPY has lifted to five-month high territory. Cable and GBP-JPY, AUD-USD and AUD-JPY, like a slew of other dollar pairings and yen crosses, have seen similar price actions. AUD-JPY, a cross with a high beta characteristic, and one that is sensitive to the fortunes of the Chinese economy, is set to post its biggest two-week gain since June-July last year. Sterling has come off the boil somewhat after rallying strongly yesterday following above-forecast UK retail sales data, which followed stronger than expected inflation data. Brexit remains a significant uncertainty for the UK economy, with the Salzburg summit yesterday coming to a conclusion without any sign of a breakthrough, with the EU effectively reaffirming its rejection of two central planks of the British government's proposal.