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EU Delays Start of Trade Talks, Pound Retreats

Pound News: GBP Gains Undermined by Trade Delays

The Pound (GBP) initially jumped against the other majors on Friday as the UK finalized an exit agreement with the EU, resolving the tricky issue of the Irish border.

However, the uptick in Sterling proved to be short lived as investors were dismayed to learn that the EU would still delay the start of trade negotiations until February at the earliest.

Looking ahead, the Pound may find itself trending lower in the first half of this week if the UK’s latest inflation and wage growth figures disappoint.

Euro News: GBP/EUR Fluctuates Whilst German Trade Balance Shrinks

An unexpected drop in Germany’s trade surplus in October aided the Pound to Euro (GBP/EUR) exchange rate’s initial gains on Friday, although this failed to prevent the pairing from slipping again towards the end of the session.

At the same time, Sterling’s gains were tempered by the UK’s latest industrial production figures as they revealed output remained flat on the month in October. Construction output was also shown to have fallen on the month and year in October.

However, the start of this week’s session could see the Euro relinquish some ground on Tuesday as Germany’s economic sentiment index is expected to have tumbled in December.

US Dollar News: USD Bolstered by Stronger-than-Expected Payrolls Data

The Pound to US Dollar (GBP/USD) exchange rate slipped by over half a cent from its best levels on Friday as Sterling losses were extended by some better than expected US employment data.

US payrolls data released on Friday afternoon showed that employment rose by 228,000 in November, beating expectations of 200,000, although the negative revision of the previous month’s figures slightly dented the ‘Greenback’s gains.

Meanwhile, the Federal Reserve is widely expected to vote to raise interest rates later this week, something that should lend strength to the US Dollar – as long as policymakers aren’t too downbeat on the prospect of interest rates increasing further in 2018.

Canadian Dollar News: GBP/CAD Volatility Prompted by Brexit Trade Delays

The Pound was forced to retreat from a weekly high against the Canadian Dollar (CAD) on Friday afternoon as Brexit sentiment was soured by EU delays to trade talks.

The uptick in the ‘Loonie’ at the end of last week’s session was also aided by a firming in oil markets thanks to rising crude demand from China.

As it’s set to be a quiet week for Canadian data, CAD movement is more likely to be reliant on fluctuations in the oil market and external developments.

Australian Dollar News: AUD Weakened as Iron Ore Tumbles

The Pound to Australian Dollar (GBP/AUD) exchange rate briefly struck a new 17-month high on Friday as iron ore prices fell sharply at the start of the session.

However, the ‘Aussie’ was able to recoup some of its losses later in the day as the announcement that Brexit trade talks would not begin until the New Year weighed heavily on Sterling.

However, the Australian Dollar may struggle to hold these gains later tonight as some economists’ forecast that NAB’s Business Confidence index will have failed to strengthen in December.


Upcoming Data 

Tuesday, 12 December, 2017

01:30              AU Business Confidence (Nov)

09:30              UK Inflation (Nov)

10:00              DE ZEW Economic Sentiment (Dec)

13:30              US PPI (Nov)

23:30              AU Unemployment Rate (Nov)


Jack Wiles

Currency Dealer

01442 892 073

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