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Trading conditions tightened a bit ahead of the FOMC statement. However, there was still action aplenty since the Aussie was in recovery mode while the Swissy was dumped pretty hard across the board.

The pound, meanwhile, was steady for most of the session but was pushed higher across the board near the end. It wasn’t enough to win out against the Aussie, though.

  • UBS Swiss consumption indicator: 1.38 vs. 1.32 previous
  • Credit Suisse economic expectations: 34.7 expected, 20.7 previous
  • U.K. preliminary GDP q/q: 0.3% as expected, 0.2% previous
  • U.K. preliminary GDP y/y: 1.7% as expected, 2.0% previous
  • BBA U.K. mortgage approvals: 40.20K vs. 39.90K expected, 40.35K previous
  • FOMC statement later; read Forex Gump’s preview here

Major Events/Reports

U.K. GDP within expectations

The preliminary reading for the U.K.’s Q2 GDP growth was released earlier and it came in at +0.3% quarter-on-quarter, which is within expectations.

Also, this is a slightly faster rate of quarterly growth compared to Q1’s +0.2%.

However, this is below the BOE’s forecast of 0.4%, as laid out in the May Inflation Report, which is a real bummer and will likely make BOE hawks (and would-be hawks) think twice about their position.

Year-on-year, GDP grew by 1.7%, which is also within expectations. However, this is the slowest annual growth since Q2 2016.

U.K. Ministers Gove and Hammond speak

Britain’s Environment Secretary, Michael Gove, told BBC Radio earlier during the session that the U.K. should “take as pragmatic an approach as possible” when it comes to Brexit. And to that end, Gove said that he supports conditions for free migration demanded by the E.U., which Gove says will be “consistent with ensuring access to the talent we need in agriculture and other areas and give business the confidence that it needs to plan.”

Moreover, Gove said that he’s okay with accepting the European Court of Justice’s ruling as being the determining factor when it comes to disputes related to the Brexit process.

Aside from Gove, U.K. finance minister Philip Hammond was also interviewed by the BBC and Hammond expressed the same cooperative tone on Brexit.

More than that, Hammond just shrugged off the relatively weak GDP by saying that:

“The figures are the first estimate of growth, based on very patchy data. They always get revised over time, and often substantially so.”

“It’s the underlying trends that matter. They don’t look favourable at the moment, given the uncertainties around Brexit and the pressure on household budgets from higher inflation.”

Repeat performance for commodities

Commodities had a repeat performance of yesterday’s price action since most commodities harvested more gains while precious metals found themselves being pushed lower.

Base metals were mixed but many were still in rally mode, albeit not as strong as yesterday.

  • Copper was up by 0.23% to $2.853 per pound
  • Tin was up by 0.10% to $20,365.00 per dry metric ton

Oil benchmarks maintained their momentum and captured more gains.

  • U.S. WTI crude oil was up by 0.77% to $48.26 per barrel
  • Brent crude oil was up by 0.52% to $50.46 per barrel

Precious metals had another bad run, likely because of another round of risk-taking.

  • Gold was down by 0.34% to $1,247.86 per troy ounce
  • Silver was down by 0.88% to $16.397 per troy ounce

Market analysts are still pointing mainly to the Greenback’s recent weakness since the U.S. dollar index was down by 0.03% to 93.89 for the day when the session ended.

As to why oil benchmarks outperformed, market analysts attributed that to expectations that official U.S. crude oil inventories from the EIA will print a draw later, which would a signal of rebalancing in the oversupplied oil market.

Another risk-on day in Europe today

Appetite for risk persisted into today’s morning London session since the major European equity indices were in positive territory again.

Market analysts say that strong earnings reports for European energy and automobile companies, as well as the oil rally, were the reasons for upbeat mood in Europe.

  • The pan-European FTSEurofirst 300 was up by 0.47% to 1,503.93
  • Germany’s DAX was up by 0.23% to 12,292.50
  • The blue-chip Euro Stoxx 50 was up by 0.20% to 3,483.50

U.S. equity futures were also in positive territory.

  • S&P 500 futures were up by 0.10% to 2,476.38
  • Nasdaq futures were up by 0.07% to 5,937.62

Major Market Mover(s):


The Swissy was the worst-performing currency of the session, likely because of the persistent risk-on vibes. However, the Swissy’s rather heavy losses during a relatively subdued session and ahead of a top-tier event raises the possibility that the SNB may have been sneakily weakening the Swissy as well.

USD/CHF was up by 53 pips (+0.56%) to 0.9584, EUR/CHF was up by 67 pips (+0.61%) to 1.1158, NZD/CHF was up by 45 pips (+0.64%) to 0.7119


The Aussie was kicked lower during the earlier session when Australia’s CPI failed to impress. Fortunately for Aussie bulls, the persistent risk-on vibes and commodities rally likely allowed the Aussie to lick its wounds.

AUD/USD was up by 27 pips (+0.34%) to 0.7918, AUD/JPY was up by 29 pips (+0.33%) to 88.54, AUD/CHF was up by 67 pips (+0.90%) to 0.7589


The pound was range-bound for most of the session and even barely budged when the U.K.’s GDP report came out. However, the pound did get a bullish boost near the end, which is when Gove and Hammond were speaking, so reduced Brexit-related jitters likely helped to give the pound a late lift.

GBP/USD was up by 30 pips (+0.23%) to 1.3049, GBP/CAD was up by 35 pips (+0.22%) to 1.6327, GBP/CHF was up by 99 pips (+0.80%) to 1.2507

Watch Out For:

  • 2:00 pm GMT: U.S. new home sales (615K expected, 610K previous)
  • 2:30 pm GMT: U.S. crude oil inventories (-3.3M expected, -4.7M previous)
  • 6:00 pm GMT: FOMC statement (no change to target range for Fed Funds Rate expected); read Forex Gump’s preview here