USD reigns supreme ahead of flurry of central bank meetings USD reigns supreme ahead of flurry of central bank meetings USD reigns supreme ahead of flurry of central bank meetings

USD reigns supreme ahead of flurry of central bank meetings

John Hardy

Head of FX Strategy

The USD is riding roughshod over this market, rising against everything now that the threat of trade wars has yielded to a shrug of the risk appetite shoulders and a resumption of business as usual: rising US equities, pricing in more Fed tightening and as the entire yield curve lifts again. The latest victim of the USD buying, aside from the constant pressure on EM currencies (see our latest EM FX Weekly published late yesterday) has been the New Zealand dollar, despite the country reporting Q1 GDP in line with expectations. Shortly after the report, the kiwi fell to a new local low versus the US dollar, joining its commodity dollar cohorts AUD and CAD in doing so and NZDUSD is now eyeing the lows since 2016 just below 0.6800.

We have no fewer than four central bank meetings today, starting first with the Swiss National Bank meeting where little signalling on policy should be expected, given still low inflation in Switzerland and the European Central Bank’s icing of its forward guidance at the meeting last week. The Norges Bank could see modest upgrades to the forward path, but oil prices haven’t been very supportive. A sufficiently positive vibe could see EURNOK dribble lower and perhaps support further upside in NOKSEK. The Bank of England shouldn’t be ready to pivot away from rather tepid expectations here, given its egg-on-the-face climbdown from hawkishness to a more neutral stance earlier this year.

The next big step for EURUSD is a break of the symbolic 1.1500 level, although strictly speaking the 1.1450 area was a more consistent pivot level in years past. Regardless, it’s hard to believe that USD momentum will end so quickly just below 1.1500, so we’ll have to sharpen our projections for where the selling may end as EURUSD looks an increasing value proposition below here. The 200-week moving average comes in just above 1.1400 while the 61.8% Fibo retracement of the entire rally sequence from the 2017 low below 1.0400 to the high above 1.2500 comes in at 1.1187.

Source: Saxo Bank

The G-10 rundown

USD – the USD reigns supreme and there are few signs on what could stop the momentum at the moment – and in fact, the situation could end in a spike of further strength if the US 10-year benchmark becomes unanchored again and heads well above 3.00% – stay tuned there. 

EUR – The EURUSD supermajor looks very heavy ahead of the obvious 1.1500 pivot zone – with the next levels noted above. Friday’s latest flash PMIs are the next fundamental data of note, but economic data out of the EU would have to surprise in the extreme to affect the interpretation of the European Central Bank’s dovish forward guidance. More volatility potential on EU existential questions and considerable focus on the June 28-29 European Council summit. 

JPY – the yen is weaker again as the market quickly recovered from Trump’s latest tariff threats and US yields are stable. We use the US 10-year benchmark as our key coincident indicator on USDJPY direction – that 3.00% level is well anchored and USDJPY is likely also well anchored and toppish, while significant upside and new highs probably would need a threat higher in long US yields again.

GBP – Carney’s Mansion House speech tonight could get more attention than the Bank of England announcement today – not looking for drama as we have spent two full months in a tight range in EURGBP between 0.8700 and 0.8850.

CHF – expectations around the Swiss National Bank today at virtually nil – could USDCHF steal the focus again among CHF pairs if we cross back above parity and especially the range highs above 1.0050?

AUD – the AUD marking its fifth negative consecutive session versus the USD yesterday and is looking at a sixth today, with the next focus on the major range low from the last week of 2016 near 0.7160 still some way off. Watching interesting pivot levels in both iron ore and copper for more downside potential.

CAD– USDCAD has broken into the range extending to 1.3700+ and we assume trend is the friend for now until proven otherwise. The US yield advantage over Canada has reached new modest highs for the cycle over recent sessions.

NZD – the kiwi is playing some downside catch-up relative to its commodity dollar peers and further downside could await as NZDUSD focus may intensify on a break below the big chart range extending below 0.6800.

SEK – EURSEK has rejected the recent downside probe, but not sure we can expect much upside unless we see a new shift back to risk sentiment.
NOK – Norges Bank could cautiously upgrade the outlook, though we’re not holding our breath for more than modest NOK strength – NOKSEK has broken free of the local range.

Upcoming Economic Calendar Highlights (all times GMT)

0730 – Switzerland SNB policy meeting
0800 – Norway deposit rate announcement
1100 – UK Bank of England announcement
1230 – US weekly initial jobless claims
1300 – US Fed’s Kashkari (non voter) to speak
1230 – US Jun. Philadelphia Fed survey
1800 – Mexico Banxico rate announcement
2015 – UK BoE’s Carney Mansion House speech.



Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.