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Commodity Correlated Currencies Surge amid Thin Trading Volumes

Pound News: GBP Subdued on Mixed Mortgage Data

The Pound (GBP) held its ground against the majority of its peers on Thursday as investors reacted to some mixed mortgage figures from the UK.

Data published by the British Bankers’ Association (BBA) revealed that, while mortgage approvals fell more than expected in November, year-on-year mortgage lending has risen 9%.

Meanwhile with no more data left to be released this week GBP investors are likely to look towards the start of next week’s session and a possible uptick in Sterling should the UK’s latest manufacturing PMI impress.

Euro News: EUR Bolstered by Upbeat ECB Bulletin

After initially strengthening, the Pound to Euro (GBP/EUR) exchange rate struggled to hold on to its gains yesterday as the European Central Bank (ECB) released its monthly bulletin.

Investors welcomed the upbeat outlook from the bank as it described the solid growth within the Eurozone over the last year while forecasting that underlying inflation is likely to pick up in the coming months.

However the Euro may be forced to relinquish some of its gains later this afternoon as economists forecast that Germany’s latest CPI figures will reveal that inflation tumbled in the Eurozone’s largest economy at the end of the year.

US Dollar News: USD Weakened by Drop in Bond Yields

The Pound to US Dollar (GBP/USD) exchange rate trended higher on Thursday as the ‘Greenback’ was weakened by a slip in ten-year US bond yields.

The dip came off the back of a disappointing drop in US consumer confidence in December as households became increasingly pessimistic in their economic outlook for the coming months.

Further weighing on the US Dollar was the latest US goods trade balance, as the US goods deficit unexpected rose again in November.

It’s set to be a quiet day for US data today which may see the US Dollar tumble even further if the decline in bond yields continues to weigh on sentiment.

Canadian Dollar News: CAD Strengthens as Oil Pushes Over US$60 a Barrel

The Pound continued to slide against the Canadian Dollar (CAD) yesterday as the Canadian currency was lifted by robust oil prices.

WTI crude prices briefly broke the US$60 a barrel mark early on Thursday due to ongoing concerns about possible supply issues caused by a pipeline explosion in Libya.

It remains to be see if this uptick in oil can last, however, with the Canadian Dollar’s fortunes for the remainder of the week likely to remain closely tied to any movement in the commodity.

Australian Dollar News: AUD Fluctuates as Commodity Prices Jump

The Pound to Australian Dollar (GBP/AUD) exchange rate fluctuated on Thursday following an uptick in commodity prices and increased risk appetite.

However the ‘Aussie’ was unable to hold on to its gains as the rise in commodities did not extend to iron ore, which fell for a second consecutive session as Chinese steel prices tumbled.

Friday’s session will likely tell a similar story as a lull in domestic data leaves the Australian Dollar enthralled by commodity markets once again.

New Zealand Dollar News: GBP/NZD Volatility Prompted by Rise in Commodities

The Pound New Zealand Dollar (NZD) exchange rate performed similarly to its antipodean cousin yesterday as the pairing fluctuated amid a jump in commodity prices.

The GBP/NZD exchange rate is likely to continue to trade in a wide range for the remainder of the session as well as a quiet week for data ties movement in the New Zealand Dollar to commodity prices.

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Friday, 29 December, 2017

13:00              DE Inflation

David Worthington

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