European session review: the pound waiting for the outcome of Bank of England's meeting

The following data was published:

(Time / country / index / period / previous value / forecast)

7:00 China Trade balance, bn June 49.98 46.64 46.56

9:00 Eurozone Industrial Production m / m in May 1.4% -0.8% -1.2%

9:00 Eurozone Industrial Production y / y in May 2.2% 1.4% 0.5%

The euro rose moderately against the dollar, recovering from declines in the first half of the session. Support for euro was the renewed investor demand for risky assets. In addition, the euro followed by the British pound, which is the main topic of traders on the eve of the scheduled for Thursday monetary policy meeting.

Eurostat Statistical Office reported a seasonally adjusted volume of industrial production in the euro area fell in May by 1.2% after rising 1.4% in the previous month. Experts predicted a decrease of 0.8%. Among the EU countries, industrial production decreased by 1.1% after rising 1.5% in April. On an annual basis, industrial production increased by 0.5% in the euro area and by 1.1% in the EU. It was expected that production in the euro zone will grow by 1.4% after rising 2.2% in April. Among the Member States, the largest decline in industrial production was recorded in the Netherlands (-7.8%), Portugal (-4.4%), Greece (-4.3%) and Romania (-4.0%). The increase was recorded in Lithuania (+ 3.9%), Latvia (+ 2.4%), Slovenia (+ 0.6%) and Malta (+ 0.3%).

The pound traded mixed against the dollar, while remaining a relative tight range. The positive impact for the currency was a decrease in uncertainty around Brexit influenced by recent changes in the UK Government. Meanwhile, against the backdrop of the lack of British data the pair is focused on the dynamics of stock markets and the overall mood of the players.

Investors are also waiting for the meeting of the Bank of England, which is scheduled for tomorrow. After the referendum, the head of the Central Bank Carney considering the possibility of easing monetary policy. It is likely that steps will be taken at the upcoming meeting. It is expected that the Central Bank to lower interest rates 0.25% for the first time since March 2009.

The yen fell against the dollar, returning to the opening levels. Earlier today, the yen strengthened after Japan Esihide Suga denied media reports that Prime Minister Abe is considering "helicopter money" (direct purchases of government bonds by the Central Bank to finance government spending or tax cuts). In addition, he said that the government plans to carry out large-scale stimulus measures in order to overcome deflation.

A certain pressure on the yen has had a dramatic revision of the forecasts for GDP growth and inflation by the Government of Japan. Explaining this decision, the Government pointed to the increase in uncertainty about the global economy, weak domestic consumption and sluggish investment. Now it is expected that in the current fiscal year which ends March 30, GDP growth adjusted for inflation will be 0.9%. Earlier this year, GDP growth is expected at 1.7%. The forecast for inflation was reduced to 0.4% versus 1.2% previously. The Government also stated that in 2017 forecasts GDP growth of 1.2% and a rise in inflation to 1.4%.

EUR / USD: during the European session, the pair has risen to $ 1.1080

GBP / USD: during the European session, the pair is trading in the $ 1.3219- $ 1.3330 range

USD / JPY: during the European session, the pair rose to Y104.85