The ruling Conservative party in the UK is facing a backlash from both voters and party members following the inclusion in the party’s election manifesto of controversial changes to how social care would be funded for the elderly. The unpopularity of the policy was evident in the latest opinion polls from the weekend which pointed to a significant drop in support for Prime Minister Theresa May’s party.
The euro hit a more than six-month high against the dollar on Monday after Germany's Angela Merkel prefaced a summit of G7 leaders later this week by saying a "too weak" currency was behind her country's massive trade surplus.
The US dollar extended its recent losses on Friday amid continued uncertainty on the US political front and some dovish comments from St. Louis Fed President James Bullard. The policymaker acknowledged the elephant in the room, indicating that US economic data have been relatively weak since the March FOMC meeting. He added this suggests that another two rate hikes this year as currently indicated by the 'dot plot', may be overly aggressive.
The pound endured a very volatile session, after the Conservative Party's proposal for controversial social care reforms left voters unimpressed.
Next trading day's important events
- 10:55 (GMT 3) Germany - Markit Manufacturing PMI (May)Preliminar
- 13:00 (GMT 3) UK - Inflation Report Hearings
- 16:45 (GMT 3) USA - Markit Manufacturing PMI (May)Preliminar
- USDJPY: 111.11
- EURUSD: 1.1255
- S&P 500: 2389.54
- NASDAQ: 6112.60