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US-China Trade Talks Resume, UK Growth Weaker Than Expected

Pound News: Brexit Jitters amid Contractions in UK Production and Monthly GDP

Monday’s UK data largely printed short of expectations, as growth results, production data and business investment showed contractions. Uncertainties about Brexit and the global growth outlook were among the reasons given as causes.

As a result of the data, the Pound was too unappealing to benefit from speculation that the UK government could be willing to find a compromise on the Brexit deal with the opposition Labour Party.

Bank of England (BoE) Governor Mark Carney will hold a speech today and this, as well as any potential Brexit developments, is most likely to drive Sterling throughout the session.

 

Euro News: Euro Lacks Fresh Impetus as Investors Await More Data

The Pound was left looking too unappealing to hold its ground even against a weak Euro yesterday, but the Euro lacked the support needed to fully benefit from Sterling’s weakness.

Last week saw a slew of disappointing German ecostats that worsened fears that Germany could fall into recession. This left the Euro weak yesterday as a lack of fresh Eurozone data meant the shared currency was left unappealing.

No notable Eurozone data will be published today either, leaving the Euro to react to movement in its rivals as investors anticipate Eurozone growth stats due later in the week.

 

US Dollar News: USD Steady amid Safe Haven Demand

The US Dollar was able to hold its ground as investors sold the Pound yesterday, thanks to firm support for safe haven currencies like the US Dollar. Last week, doubts that the US and China could reach a trade deal worsened and left investors seeking out safe havens.

These US-China trade concerns persisted on Monday as negotiations between representatives from the world’s two biggest economies resumed. On top of US-China trade jitters, the US Dollar is benefitting from recent strong data.

US job openings data from JOLTs will be published today, as well as NFIB’s latest business optimism index. US-China trade developments are more likely to influence the US Dollar however.

 

Canadian Dollar News: CAD Remains Strong on Last Week’s Data

Despite weakness in oil prices and mixed market demand for risky trade-correlated currencies amid US-China trade tensions, the Canadian Dollar saw solid demand yesterday and was able to climb versus the weak Pound.

The Canadian Dollar remained appealing yesterday thanks to continued support following last Friday’s surprisingly strong Canadian job stats. The data showed a surprising jump in Canadian jobs and signs that the job market had further to grow.

No notable Canadian data will be published today, so investors are likely to pay close attention to any potential US-China trade developments and other news that may influence risk-sentiment.

 

Australian Dollar News: ‘Aussie’ Rebounds from Lows

The Australian Dollar saw broad weakness last week, caused by Reserve Bank of Australian (RBA) interest rate cut bets and renewed fears that US-China trade relations may not be resolved after all.

At the end of the week, the Australian Dollar hit lows against several major rivals. As a result, investors have been buying the currency back from its lows in profit taking since markets opened today, despite the mixed demand for riskier currencies.

NAB’s January business confidence stats for Australia will be published today, as will December home loans stats. These could give the Australian Dollar some stronger support if they impress, but the ‘Aussie’ would also strengthen if US-China trade talks go well.

 

Upcoming Data

Tuesday, 12th February

00:30    Australian NAB Business Confidence

00:30    Australian Home Loans

11:00    US NFIB Business Optimism

15:00    US JOLTs Job Openings

 

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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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