Market Update

While it's not the US but Canadian dollar that is the strongest currency today, the USD is not far behind the CAD, gaining more than 1% against the euro, Norwegian krone and Swedish krona today as moods improve again and the dollar has been supported by the data.

There's not so much behind this positive swing on the markets other than a lack of fresh worrying news from China. That, however, means that fear may once again return to the market unless investors become reassured that the Chinese economy is facing a hard-landing scenario.

The dollar has been supported with a strong data today indicating that tomorrow's Q2 GDP release might actually be even better than expected. On the other hand euro has been hit by a dovish speech from Praet. Not everyone is sure that a rally on the EURUSD is over though - Morgan Stanley still sees the pair higher.

Scandinavian currencies are struggling today as well. The Norwegian krona is tumbling today even as oil tries to bottom up as the unemployment rate came out higher than expected. On the other hand, Swedish economy gave another positive sign that was pretty much ignored by the market. The SEK is gaining only slightly vs a weak euro.

Finally, gold prices are declining strongly today reflecting a stronger sentiment for the dollar. Investors still await the data on the US inventories at 3.30pm BST. Let us recall that the API report pointed at a huge decline (over 7mb) yesterday.