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Brexit Uncertainties Return to Focus for Sterling

Pound News: Brexit Hopes Not Enough to Keep Sterling Gaining

After a bullish performance on Monday, Sterling was more mixed yesterday. Pound investors turned attention back to Brexit amid hopes that UK Parliament would smoothly pass the government’s Brexit plans, but concerns about a 2020 of uncertain UK-EU Brexit negotiations persist and pressure Sterling.

This week’s only remaining UK data of note will be published today. Britain’s final Q3 labour productivity results are unlikely to be as influential as potential Brexit developments.

 

Euro News: Eurozone Retail Sales Help Keep EUR Supported

While the Euro was a little weaker yesterday amid a rising Pound and US Dollar, the shared currency still avoided major losses due to continued signs of resilience in Eurozone ecostats. Eurozone inflation was solid, and retail sales came in well above forecasts.

Reaction to German factory orders and Eurozone confidence stats could drive the Euro today as investors await tomorrow’s key German trade and production stats.

 

US Dollar News: USD Rebound Supported by US Data

The US Dollar saw a more solid rebound yesterday. A lack of quick escalations in US-Iran tensions left markets a bit calmer, and the day’s US non-manufacturing PMI data beat expectations. These factors helped the US Dollar to strengthen following last week’s poor performance.

US employment data from ADP will be published today. If it falls short of expectations, investors will become more anxious about the health of the US job market ahead of Friday’s anticipated US Non-Farm Payroll report.

 

Canadian Dollar News: Recoil from Market Panic Puts Pressure on Oil, CAD

Following days of gains in reaction to US-Iran military action, oil prices tumbled again yesterday. As the Canadian Dollar has been benefitting from rising oil, the recoil in oil limited CAD strength. The Canadian Dollar was also pressured by news that Canadian exports were weaker than expected in November.

No notable Canadian data will be published today. Canadian Dollar investors will react to developments in global sentiment and anticipate major Canadian data due later in the week.

 

Australian Dollar News: ‘Aussie’ Continues to Plunge on Geopolitical Jitters

The Australian Dollar continued to take the brunt of the market’s risk-aversion yesterday. US-Iran jitters calmed but still kept pressure on AUD, and the currency was also weakened by concerns surrounding the worsening Australian bushfire crisis.

Amid the market focus on ongoing crises, the Australian Dollar’s reaction to this morning’s Australian building stats may be limited. Australian Dollar investors are also anticipating Australian trade and retail stats due later in the week.

 

Upcoming Data

Wednesday, 8th January

00:30    Australian Building Permits

07:00    German Factory Orders

07:45    French Trade Balance

09:30    UK Labour Productivity

10:00    Eurozone Confidence

13:15    US ADP Employment Change

 

James Spurway
Director of Sales and Dealing

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