The Euro and pound have extended their respective runs against the US dollar to their highest level since November 2024, but we are seeing some profit-taking ahead of the North American open. This would also make sense on account of the aggressive moves we’ve been seeing and ahead of the European Central Bank event risk.
As per our special report preview, the ECB is expected to cut rates by another 25 basis points. Another variable that could be playing into things right now is renewed downside pressure on US stocks, with equity futures under a good deal of pressure. Clearly, all of the geopolitical risk and trade tension are factoring into the negative sentiment. Sluggish US economic data and slumping oil haven’t helped the picture either.
Earlier today, Eurozone and UK construction PMIs were a miss, along with Eurozone retail sales, which have only added to the recent selling pressure on the Euro and pound. Looking ahead, aside from the already mentioned ECB decision, we get Canada trade, US trade, US initial jobless claims, Canada IVPM, BoE speak, and Fed speak.
We also get the emergency summit of European leaders in Brussels to discuss further support for Ukraine and defense matters. Another important focus today will be on any updates around the current state of affairs with respect to US tariffs on Canada and Mexico.
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