The euro gains further against the dollar as the market shifted its attention back to the disparity in central bank rate outlook between the European and US after digesting the change in the Fed rate cut chance. The euro climbed to above 1.34 versus the dollar, while the sterling gained 100 pips today to as high as 1.9845.
Besides, the yield premium of US 10-year Treasury notes over German equivalents narrowed to 0.505% from a four-month high of 0.684% on June 12. This reduced the attractiveness of the US dollar-denominated-assets.
Tomorrow will see two housing data from US. Housing starts are expected to decline from 1528k to 1470k in May. Building permits are forecasted to increase slightly to 1470k from 1457k a month earlier.
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