Today's Highlights

  • A pretty big Brexit deal nudge for ministers

  • Keep an eye on the Pound

  • Australian Dollar dips

 

Current Market Overview

Sterling has continued to move higher as markets still believe a “No Deal Brexit” is now the least likely outcome. The Pound rallied above 1.3000 yesterday as it emerged that The Prime Minister’s deal is being reconsidered by some of her most vociferous critics. Jacob Rees-Mogg has stated that he would prefer her deal over remaining in the EU and Boris Johnson hinted that he might be persuaded to change his mind if enough alterations were made and the UK renewed talks with the EU with conviction. Michele Barnier, the EU’s Chief Brexit negotiator, said yesterday that the UK had a choice between Mrs May’s deal or No deal and that unless a majority for an alternative agreement is formed then No deal would be the default position. So, a chaotic withdrawal cannot completely be ruled out, but the chances of a soft Brexit are increasing.  

A pretty big Brexit deal nudge for ministers

Airbus Chief Executive, Tom Enders, has warned that the company may move some of its operations out of the UK in the event of No deal, predicting sharp job losses on such an outcome. Airbus employs 14000 people in the UK and Enders insisted that he was not bluffing. This follows British stalwarts Dyson announcing a move of headquarters from the UK to the Netherlands, and Japanese big-hitters Sony are doing the same. This should focus minister’s minds and may put more pressure on them to find a compromise.

Keep an eye on the Pound

For now, the Pound is in the ascendancy, waiting for further confirmation. The next levels to watch are 1.32 versus the US Dollar and 1.1550 versus the Euro.

Australian Dollar dips

The Australian Dollar continued to decline overnight, despite an upbeat labour report. Employment data for December came in at 21,600 versus an expectation of only a 16,500 rise. The unemployment rate was reported at 5.0% beating expectations of 5.1%. Markets ignored the data and sold the Australian Dollar on expectations that the Reserve Bank of Australia (RBA) may be forced to cut interest rates in the near future to renew confidence and assist the cooling housing market.

Euro has potential to slide on economic risks

The European Central Bank (ECB) meets later this afternoon. There has been underlying weakness in the Eurozone and the single currency has been under pressure on growing speculation that the ECB will not be able to raise interest rates until late next year. Policymakers are likely to leave rates unchanged at today’s meeting, although any hint that there are further risks to the EU economy could see the Euro continue its slide lower.

Markets focus on Eurozone announcements and Brexit

The data calendar is light and the ECB meeting, followed by Mario Draghi’s press conference, will be the main focus today. However, Brexit will, of course, dominate the agenda as we head towards another vote next Tuesday.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD: risk aversion could send it sub-1.1180

EUR/USD capped by a critical Fibonacci resistance for two weeks in-a-row. The American dollar has closed the week on a high note as hopes for significant rate cuts faded.

EUR/USD News

GBP/USD: bears to retake control on a break below 1.2475

Renewed demand for the greenback has resulted in the GBP/USD pair giving back half of its Thursday’s gains at the end of the week, with the pair closing it just above the 1.2500 figure.

GBP/USD News

USD/JPY: bearish case firmer once below 107.20

The USD/JPY pair flirted with the 108.00 level by the end of the week on renewed demand for the greenback but retreated sharply from the level to settle at around 107.70.

USD/JPY News

Something has spooked the Fed

We wish we knew what it is. Wild talk of the US joining Japan and Europe with zero or negative return on the 10-year is or should be very frightening.

Read more

Gold consolidates around $ 1440, eyes US data for fresh direction

Gold (futures on Comex) extends its side-trend around the 1440 mark into the mid-European session, having stalled its retreat from 2019 highs of 1454 near 1437 region.

Gold News

Majors

Cryptocurrencies

Signatures