FX Update: Narrow ranges have been prevailing
FX Update: Narrow ranges have been prevailing in quiet early-week trading, with the dollar consolidating a recent phase of outperformance. Stock markets have been mixed in Asia, while S&P 500 futures are showing modest declines. The FOMC, BoJ, and BoE all meet this week and though none are expected to change rates, markets will be eager to gauge any shift in tone. The evolving Fed policy outlook has led the recent charge in expectations that major central banks will maintain their accommodative policy postures, if not suggest a more dovish stance, with the futures pricing in a cut as soon as July, thanks to rising tensions in the Middle Ease, elevated uncertainties over a U.S.-China trade deal, signs that the tariffs are weighing on growth, and and low inflation. For now, expectations for monetary policy accommodation have been underpinning global stock markets. EUR-USD has been plying a narrow range in the low 1.1200s, holding within the range seen on Friday and consolidating above the low seen then at 1.1202, which followed above-forecast prints in U.S. retail sales and production data. USD-JPY managed to eke out a six-day high at 108.70 after a turn of yen selling. Cable has remained heavy, though has so far managed to hold just above the near three-week high seen on Friday at 1.2580. The dollar has also been consolidating recent gains against the Australian and Canadian dollars.