25/09/2018 - Draghi's Inflation Comments Boost Euro 

EUR

The euro rose to more than a three-month high against the dollar on Monday after European Central Bank chief Mario Draghi said he sees a vigorous pickup in euro zone inflation, backing moves toward unwinding an ECB asset purchase program meant to stimulate the economy.

The single currency has been on an uptrend the last few weeks, bolstered by generally solid European economic data. Over the last 10 days, the euro has risen 2.5 percent versus the greenback.

The euro earlier was also boosted after German Chancellor Angela Merkel’s coalition government resolved a dispute over the country’s scandal-tainted spy chief on Sunday, ending a threat to the six-month-old administration.

GBP

Brexit minister Dominic Raab said he was confident Britain would eventually clinch a deal with the European Union. But those comments were unlikely to support the pound for long, with May’s leadership under increasing pressure ahead of her Conservatives’ annual conference this week.

Britain’s opposition Labour Party will vote this week on whether to keep a second Brexit referendum as an option if Theresa May fails to get her plan for quitting the EU through parliament. That places further pressure on May though it is unclear what impact the prospect of a second referendum would have on sterling.

USD

With the market forecasting a rate hike this week, another in December and two more next year - roughly in line with Fed policymakers’ projections - analysts said only unexpectedly strong data would change those bets.

Earlier the dollar snapped a two-week losing streak as the weekend brought global trade tensions back into the spotlight after Beijing released a white paper on its trade dispute with the United States, saying it would seek a reasonable outcome, while also describing U.S. tactics as “bullying.”

Key Announcements

15.00 – USD: CB Consumer Confidence Forecast at 132.2 against previous of 133.4