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Fears of Future UK-EU Relations and Coronavirus Jitters Drive Markets

Pound News: UK-EU Negotiation Anxiety Keeps a Lid on Sterling’s Appeal

Even though the Pound has been supported by stronger than expected UK data this week, its recovery has been limited. Concerns over the possibility of a hard Brexit and how this could affect the City of London as a financial centre dragged on the Pound yesterday.

No notable UK data will be published today, leaving Pound investors awaiting potential Brexit developments or speculation. Next week’s UK growth data is also anticipated.

 

Euro News: EUR Struggles for Movement as German Data Continues to Disappoint

The Euro was again driven more by movement in rival currencies, as domestic news fails to impress. Yesterday’s German factory orders stats printed a deep contraction, keeping investors anxious that Germany’s economic activity was still weak and keeping pressure on the Euro.

Reaction to today’s German and French trade and production stats could drive late-week Euro movement. The shared currency will also remain influenced by movement in its biggest rival, the US Dollar.

 

US Dollar News: USD Remains Resilient on Risk-Sentiment and US Data

The US Dollar continued to edge higher against rivals like the Pound and Euro yesterday. It has been benefitting from the slightly softer safe haven demand this week, as well as the fact that most of this week’s US data has beaten forecasts.

Today’s Non-Farm Payroll report could be the week’s most influential US data however. If the key NFP data disappoints investors, Federal Reserve interest rate cut bets could rise again and the US Dollar would come under fresh pressure.

 

Canadian Dollar News: Canadian Dollar Stabilising despite Mixed Oil Prices

The Canadian Dollar was able to keep climbing against a weak Pound yesterday. The Canadian Dollar found some support in the improved market trade outlook, even though recovery in oil prices was limited and continued to keep a lid on Canadian Dollar appeal.

This week’s most influential Canadian data will be published today. If Canada’s January job market report beats forecasts, the Canadian Dollar could see stronger support and sustain gains before markets close for the week.

 

Australian Dollar News: Poor Retail Data Fails to Bring Down Bullish ‘Aussie’

The Australian Dollar remains one of this week’s best performing major currencies. Even as yesterday’s Australian retail sales results showed a deeper than expected contraction, the trade-correlated Australian Dollar found fresh support on news that China would cut some tariffs on US goods.

Reaction to a speech from Reserve Bank of Australia (RBA) Governor Philip Lowe could cause ‘Aussie’ movement today, but the currency is more likely to be driven by coronavirus speculation and development.

 

Upcoming Data

Friday, 7th February

RBA Governor Lowe Speech

00:30    RBA Statement on Monetary Policy

07:00    German Trade Balance

07:00    German Industrial Production

07:45    French Trade Balance

07:45    French Industrial Production

13:30    US Non-Farm Payroll Report

13:30    Canadian Job Market Report

15:00    US Wholesale Inventories

15:00    Canadian Ivey PMI

 

James Spurway
Director of Sales and Dealing

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