FX round-up: Sterling claws back some losses amid OPEC, ECB focus

Sterling clawed back some lost ground against major currencies amid a welter of news from OPEC and the European Central Bank, but tapered against the yen and rand.

At 17:06 BST, sterling was up 0.03% to $1.4420, unhindered by UK construction data for May that came in below views. The dollar-spot index gained 0.06% to $95.508. Both the greenback and pound firmed against most commodity currencies.

Sterling has suffered in recent sessions as polls suggested UK's referendum on 23 June would see it leave the EU, contrary to earlier ones. All contained a considerable number of people undecided on how they would vote.

Another poll out today, this one by Reuters, said forex forecasters saw sterling sinking 9% against the dollar in the immediate wake of a UK leave vote, but rising 4% if it remained part of the single-currency bloc.

The forex-related news of the day was undoubtedly ECB holding its monetary policy steady, and cautiously revising up its 2016 forecasts for inflation and economic growth.

A dovish ECB President, Mario Draghi, said Britain's EU in-out vote was one of the downside risks to the economy.

This saw the euro marginally weaker against sterling and the dollar, which were respectively up 0.32% to €1.2926 and up 0.29% to €0.8965 as traders considered ECB's new numbers and commentary.

Daiwa Capital Markets Research concluded that the ECB's position was unsurprising.

"We continue to expect that, at a minimum, the (ECB) asset purchase programme will eventually be extended beyond the current March 2017 end date," said Daiwa.

Also in Europe, OPEC, meeting in Vienna, said its members had not agreed on oil output levels, although the need to draw inventories down from levels above the five-year average was noted.

Crude prices knee-jerked lower in response, but were up this evening. Energy Information Agency (IEA) said US crude stocks fell 1.4m barrels in the week to 27 May to 535.7m barrels.

FXTM chief market analyst Jameel Ahmad said there were reports of OPEC and IEA expecting a drop in global inventories in second-half 2016, which would be supportive of crude prices.

Stateside, US private-sector job additions for May came in a jot below forecasts, while the number of people filing for unemployment benefits unexpectedly fell.

Against this backcloth, Federal Reserve governor Daniel Tarullo appeared to set a slightly higher bar to hiking interest rates than some of his counterparts in recent weeks.

Tarullo, speaking to Bloomberg TV, would not comment on what specific decisions he might adopt at any future meetings.

However, when discussing options available to policymakers, he expressed a slight preference for framing the debate about whether to raise interest rates in terms of clearly identifying why it was so pressing to do so immediately.

Dollar/yen was on the move again, retreating 0.71% to 108.76 as traders apparently continued to factor in prospects for fresh fiscal stimulus measures in Asia´s second largest economy.

US monthly jobs data scheduled for release on the next day were expected to reveal a 160,000 incerase in payrolls during the month of May, with a strike by workers in Verizon seen adding to the potential for a hard-to-read report for markets.

The strike, which began on 13 April, could be expected to subtract approximately 35,000 positions from May´s tally; yet much of that might possibly have been compensated for by temporary help hiring, analysts at Barclays said in a research note sent to clients on 27 May.