GBP
Sterling has struggled in early trading as traders adopted a “ risk -off” approach this morning . The pound already under pressure when retail sales disappointed on Friday as come in from renewed selling as the woes of Evergrande , China’s second largest real estate company created a demand for “ safe haven “ currencies . Evergrande is $300 Bln in debt and with Chinese authorities appear seemingly not eager to bail it out , markets fear a wider crisis in China’ real estate and the implications for global growth. Apart from this , re-escalation of tensions between China and western nations US, UK and Australia , has further dented investors’ appetite for perceived risker assets . No major data due for release today . Main events this week are policy meetings from both the Federal Reserve Bank and the Bank of England .
EUR
The Dollar has extended Fridays gains against the EUR this morning. The single currency has fallen to a one month low against the greenback , which has found support from safe haven flows . The German producer price index beat expectations this morning coming in at 1.5% . Analysts had expected a rise of 0.8%. This reaffirms the current trend in cost pressures globally.
USD
The dollar rallied to a month-high in Asia on Monday as looming catastrophe at indebted Chinese property developer China Evergrande dragged Hong Kong stocks to an 11 month low. Shares in Evergrande plummeted 15% as traders worried about its ability to pay $83.5 million bond interest payment this Thursday . The company said on Sunday it has begun to repay some investors with real estate . Markets fear that unless it is bailed out , there could be a collapse in the Chinese property market further adding to concerns about the health of China’s economy.
No major data due for release today .