DAILY FX WRAP: EUR breaks 1.18 following strong Eurozone PMI data, while Trump weighs on MXN

EUR: No fireworks from Draghi at the Lindau meeting as the President does address future policy or economic outlook in his speech. EUR edged higher throughout the session to breach 1.18 amid firm PMI readings from the Eurozone’s two largest economies, Germany and France, which may have been a surprise to many, given yesterday’s soft ZEW survey from Germany.

GBP slightly lower today, although much of the focus is on the GBP TWI, which is now at a fresh 2017 low at 74.90. Subsequently, suggesting that the outlook for import prices could be back on the rise. Buying through the crosses also kept GBP offered with EUR/GBP continuing its appreciation past 0.92.

NZD is the worst performer, slipping by 0.8% after the NZ governments pre-election fiscal update, in which they cut their GDP forecast, while cross related buying seen through AUD/NZD had also kept NZD pressured as the cross breached 1.09.

MXN notably softer this morning following comments from President Trump who stated that the US would probably scrap NAFTA at some point (Mexico are to hold 2nd round of talks in September). Additionally, Trump also promised a government shutdown in order to build Mexico border wall, subsequently pushing USD/MXN higher by as much as 1%.

23 Aug 2017 - 15:44- Research Sheet- Source: RANsquawk

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