USD weaker after poor headline income data

Today's Highlights

Sterling slips as BOE investigated

USD weaker after poor headline income data

FX Market Overview

The investigations come thick and fast don't they. FIFA has got all manner of enquiries going on into its activities, VW may well be the tip of an emissions rigging iceberg and now the BOE is being investigated over alleged tipping off over deposit rate bidding. I am OK with all of this but if they start investigating the Tufty Club, well that'll be the last straw.

It's hard to know whether the BOE investigation by the Serious Fraud Office has caused the Pound to slip but it has definitely slipped. Sterling - Euro has slipped below the €1.35 trend line which has supported it for the whole year. Whether that is a proper turnaround or not is open to debate but the next support is at 1.3360 and that's a trend line that has been in place since mid-2013. As long as we remain above that, the upward momentum is still intact. We get UK mortgage and consumer credit data today; none of it likely to boost Sterling but we also get a speech from the governor of the bank of England later today. That'll be watched with renewed interest.

The US Dollar weakened a tad after personal income was shown to have only grown by 0.3% last month. That's below expectation and the small scale fall in the USD was to be expected but the underlying data was quite robust, so the decline halted pretty quickly. This afternoon brings US consumer confidence data and that is expected to be rather poor. Further USD weakness could well ensue. Traders will also be looking for comments from Fed speakers over the next few days and the culmination of the week is US employment data. This could be a bumpy ride for the USD.

It should also be remembered that tomorrow is the last working day of the month and the quarter. Traders are likely to be squaring their books for that, so there is plenty of scope for volatility and 'bounce back' after the activity of the last few days. Please make sure you don't get caught out.

Meanwhile, the fall in commodity prices is keeping the likes of the Aussie and Kiwi Dollars weak. That is the same story for the Canadian Dollar and South African Rand. We have seen the fall out in the mothballing of the SSI steel works in Redcar and downsizing of mining and extraction activity around the globe. The slowdown in China is causing a longer term re-alignment of raw material activity and that will continue to impact the currencies of the countries most active in those markets.

Away from the markets, the book by Andy Weir, 'The Martian', is just about to be launched as a movie in cinemas across the country. I have to say, if it is anywhere near as good as the book, it will be well worth a watch but what lengths have they gone to in order to promote it. I mean....pouring salty water on the planet surface. That's just marketing genius.