Neither May US CPI nor the June ECB meeting should reverse the current soft USD environment
USD: All focus on the May US CPI release today. Most expect headline and core prices to jump 4.8% and 3.3% respectively. Although this should be a peak in US prices, inflation should remain elevated and above the target throughout the year. With the Fed in no rush to respond on the monetary policy side (the latest US labour market providing a further excuse for this cautious stance), rising US price pressure should continue to affect USD via deeply negative US real rates.
CAD: The loonie is up to the 1.21 mark but holding in the high 1.20s through the overnight session as yesterday’s BoC announcement was a non-event. The statement-only affair. We think markets should prepare for another QE pace reduction at the BoC’s July meeting to guide funds toward a breach of the 1.20 level. Deputy Governor Lane delivers an Economic Progress Report late today, though like the policy announcement yesterday, it is likely to be a holding exercise ahead of the “live” BoC meeting in July when a further tapering move is a possibility.
EUR: All the focus is on the ECB meeting today. The ECB is likely to avoid any tapering talk but given that this has already been communicated by ECB officials, this should not come as a surprise to markets and in turn, should have a limited impact on EUR. Expectations of no change in guidance on asset purchases, the balance of risks is modestly skewed to a higher EUR, should the press conference not reiterate the tapering on hold message strongly enough. The balance of risks is skewed to modestly higher EUR/USD.
GBP: PM Johnson meets President Biden today, ahead of the G7 Summit. With the news that President Biden is to press the UK to uphold the Good Friday Agreement, this should be marginally positive for GBP as it reduces the odds of further escalation in trade tensions between the UK and the EU. GBP/USD price action will be primarily driven by the market response to the US May CPI and the June ECB meeting.
Get access to our market experts and sign up to receive the latest updates on any currency with our real-time exchange rate reports.
Sign up to receive the latest market news from our experts.
Who can use the MTFX payment service?
Individuals and businesses who need to send money in foreign currency internationally can use MTFX’s services. The beneficiary of the transfer must have a bank account for the funds to be paid into.
Personal clients usually use our services to transfer money between their own accounts in two different countries.
Business clients usually use our services to transfer funds to suppliers, fund international operations, or repatriate overseas earnings.
Why should I use MTFX and not my own bank?
MTFX offers currency exchange rates that are 2-5% better than those offered by the banks. Personal clients usually save hundreds of dollars per transfer and for larger transfers, the savings can run into the thousands.
We also offer excellent customer service, dedicated currency specialists, and a 24/7 online platform with best-in-class technology that allows you to complete transfers from any device virtually anywhere in the world.
Business customers save with better currency exchange rates and proven solutions geared towards managing and mitigating foreign exchange risk. Our solutions include forward contracts, market orders, rate alert services, and much more - all backed by great technology and great people.
How do customers send funds to MTFX?
Funds can be transferred via wire transfer, Electronic Funds Transfer (EFT), or ACH payment services. MTFX maintains bank accounts in all major currencies with highly-rated banks. Our banking infrastructure ensures that you can transfer funds to us quickly and securely.
How long does it take MTFX to transfer funds?
Our global network of banking partners allows us to get funds to virtually anywhere in the world quickly and efficiently. Most wire transfers from MTFX will be received by your beneficiary within 24-48 hours. MTFX also offers same-day transfers that are almost instantaneous, as well as low-cost in-country payment services for your less urgent transfers. For further information please speak to one of our currency specialists.