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Sterling Tries to Claw Back Losses despite Poor Car Sales

Pound News: Disappointing Car Sales and Brexit Debate Limit GBP

December’s new car sales did little to help the Pound, as the figure fell from -3% to -5.5%.

It seems likely that with Parliament returning from their recess and the Brexit negotiations continuing Pound Sterling exchange rates will become increasingly volatile, although the date of the ‘meaningful vote’ still remains unknown.

After speaking with European leaders the Prime Minister, Theresa May, stated:

‘In the coming days what we’ll set out is not just about the EU but also about what we can do domestically, so we will be setting out measures which will be specific to Northern Ireland; we will be setting out proposals for a greater role for Parliament as we move into the next stage of negotiations.’

Euro News: Retail Sales Better than Anticipated

The Euro saw some better-than-anticipated figures released yesterday morning, as German retail sales increased from -0.3% to 1.4% in November compared to the previous month.

Retail sales showed that compared to the previous year, the figure fell from 5% to 1.1%, a smaller fall than anticipated.

November retail sales for the Eurozone as a whole were positive, as despite the forecast drop, the figure remained steady at 0.6%.

December’s Eurozone business climate figures are due for release this morning. If the forecast is correct, it may see the Euro fall against major currencies.

The forecast suggests the figure is going to fall from 1.09 to 0.99, a lower figure than October, which was a 17-month low.

US Dollar News: Consumer Credit to Give Indication on Economy

December’s ISM non-manufacturing PMI was released yesterday, with the figure falling further-than-forecast, from 60.7 to 57.6, showing that growth had slowed.

While US factory orders increased in November, they did not increase as much as forecast, as the figure currently sits at 0.3%, jumping from the previous -2.1%.

The Pound Sterling US Dollar exchange rate rose yesterday morning and into the afternoon, further aided by the worse-than-expected US PMI figure.

This evening will see the release of the US consumer credit change for November, which is forecast to drop from $25.38B to $18B, potentially causing USD to fall against some currencies.

Canadian Dollar News: Mixed Data sees CAD Volatile

The Pound Canadian Dollar (GBP/CAD) exchange rate remained volatile over the course of yesterday.

The Ivey purchasing managers index for December was released yesterday afternoon, with the seasonally adjusted figure showing an increase, rather than a forecast drop, from 57.2 to 59.7.

This afternoon will see the release of the international merchandise trade figure for November released by Statistics Canada, which is set to decline further, and could see Canadian Dollar exchange rates fall.

Australian Dollar News: All Eyes on US-China Trade Talks

Performance within the Australian manufacturing sector contracted for the first time in over two years, as the figure for December fell from the previous 51.3 to 49.5.

Trade talks between the US and China began yesterday in Beijing, marking the first formal meeting between the US and China since a 90 day temporary trade truce was agreed upon between President Donald Trump and President Xi Jinping.

The talks will continue today, and if there is a breakthrough or agreement it is likely that there will be movement within risk correlated currencies such as the Australian Dollar.

 

Upcoming Data

8th January

10:00     EUR Business Climate (December)

13:30     USD Trade Balance (November)

13:30     CAD International Merchandise Trade (November)

20:00     USD Consumer Credit Change (November)

 

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

Arron Morris

Senior Currency Broker

adm@fcgworld.co.uk

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