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Markets Driven by Hopes of US-China Trade Breakthrough

Pound News: Hope over Brexit Deal Buoys Sterling

After tumbling on fresh Brexit concerns on Tuesday, the Pound rebounded slightly yesterday as investors bet that the UK-EU Brexit deal would likely pass eventually.

Markets are increasingly expecting that the UK-EU Brexit deal will be blocked when it first goes to Parliament in early December. However, some economists believe it is highly unlikely for the opposition to continue to vote against a deal when the alternative is a ‘no-deal’ Brexit.

Some of this week’s more notable UK data will come in today, including the Bank of England’s (BoE) October consumer credit stats. However, any perceived shifts in support for the Brexit bill will remain the primary focus.

Euro News: US Dollar Strength and Disappointing Eurozone Data Weigh

Investors sold the Euro on Wednesday due to both underwhelming Eurozone data and strength in the US Dollar (USD). The US Dollar is the Euro’s biggest rival and often sees a negative correlation with the shared currency.

GfK’s German consumer confidence survey figures for December fell short of expectations, coming in at 10.4 rather than the expected 10.5. This put further pressure on the Euro.

Much of the Eurozone’s most influential ecostats will be published today, including French growth, German unemployment, Eurozone confidence data and most vitally Germany’s November inflation rate projections.

US Dollar News: GBP/USD Recovery Limited by Federal Reserve Speculation

While market demand for safe haven currencies like the US Dollar has lightened in recent sessions, the Pound to US Dollar exchange rate’s Wednesday gains were limited by Federal Reserve speculation keeping the US Dollar buoyed.

For most of yesterday’s European session, the US Dollar was kept appealing thanks to some hawkish comments from Fed Vice Chair Richard Clarida, as well as anticipation for Fed Chair Jerome Powell to take a similar stance. The latest US growth data had little impact on US Dollar movement.

Further notable US news, including personal income and spending stats from October, as well as the latest Fed meeting minutes, could drive the US Dollar today as investors anticipate a dinner meeting between the American and Chinese Presidents at the end of the week.

Canadian Dollar News: Oil Prices Keep CAD under Pressure

Investors continued to sell the Canadian Dollar yesterday due to strength in the US Dollar (USD), as well as weaker commodity prices. GBP/CAD advanced to its best levels in a week as a result, despite higher market demand for riskier trade-correlated currencies.

Part of the Canadian Dollar’s weakness was due to continued weakness in the price of oil, Canada’s main export.

Canada’s Q3 current account results will be published today, although Canadian Dollar investors are more likely to react to shifts in risk-sentiment and oil prices.

Australian Dollar News: Hopes over US-China Trade Breakthrough Keep GBP/AUD Down

The Pound to Australian Dollar exchange rate didn’t recover as much as other Pound majors yesterday, as hopes that the US and China could soon reach a breakthrough in trade talks buoyed market demand for risk currencies like the ‘Aussie’.

US officials indicated that US President Donald Trump and Chinese President Xi Jinping could reach some kind of agreement if they remain open to potential concessions.

Australian Dollar investors will remain focused on US-China trade tensions today as the G20 meeting nears, but Australian home sales data could also influence ‘Aussie’ movement.


Upcoming Data 

Thursday, 29th November

00:00    Australian HIA New Home Sales

00:30    Australian Private Capital Expenditure

07:45    French Growth Rate

08:00    Eurozone ECB President Draghi Speech

08:55    German Unemployment Rate

09:30    UK BoE Consumer Credit

09:30    UK Mortgage Lending and Approvals

10:00    Eurozone Business and Consumer Confidence

13:00    German Inflation Rate

13:30    US PCE Price Index

13:30    US Personal Income and Spending

19:00    US Fed Meeting Minutes


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To keep up to date with the Euro, visit the Euro Blog in our Currency News section.


Thomas Taylor

Currency Trader

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