Reports UK is Prepared to Stay Within EU Customs Union Send GBP Higher

British Media has reported that the UK is to inform the EU that they are willing to stay in the EU Customs Union beyond 2021. The Government agreed on a new “backstop” earlier this week to avoid a hard border on the island of Ireland. This came after rejecting earlier EU proposals ahead of the looming June deadline. This was despite objections from Foreign Secretary Johnson and Environment Secretary Gove. GBP has rallied well and is the strongest currency as we approach the European open, up from 1.34554 to 1.35687 against the USD. EURGBP is down to 0.87206 from yesterday’s high of 0.87823. The USD has weakened somewhat, with EURUSD reaching a high of 1.18373 overnight.

Eurozone Consumer Price Index – Core (YoY) (Apr) came in as expected, unchanged at 0.7%. Consumer Price Index (MoM) (Apr) was also as expected at 0.3%, from 1.0% previously. Consumer Price Index (YoY) (Apr) was also as expected, unchanged at 1.2%. Consumer Price Index – Core (MoM) (Apr) was as expected at 0.2%, from 1.4% prior. CPI data is showing a decrease in the monthly figures, with yearly figures remaining in line with the previous reading. EURUSD fell from 1.18376 to a low of 1.17662 after this data release.

US Housing Starts (MoM) (Apr) were 1.287M against an expected 1.310M, from a previous number of 1.319M, which was revised up to 1.336M. Building Permits (MoM) (Apr) were 1.352M against an expected 1.350M, with the prior reading of 1.354M, which was revised up to 1.377M. This data shows a decrease in activity from previous readings. These data points have been recovering since hitting lows of 0.46M and 0.49M respectively after the financial crisis. GBPUSD halted its decent at 1.34668 when the data was released.

US Industrial Production (MoM) (Apr) was released, coming in at 0.7%. The consensus was for 0.6% from 0.5% previously, which was revised up to 0.7%. This measure rebounded strongly, to reach the highest reading since December 2014 in March, after slipping below the zero line previously. Capacity Utilization (Apr) was also released at this time, with a reading of 78.0% against the expectation of 78.4%, from 78.0% previously, which was revised down to 77.6%. The readings came in line with previous data, with capacity failing to create a new high and missing expectations. USDJPY rose from 110.056 to 110.341 after the release.

EURUSD is up 0.10% overnight, trading around 1.18185.

USDJPY is down -0.10% in early session trading at around 110.284.

GBPUSD is up 0.52% this morning, trading around 1.3560.

Gold is up 0.18% in early morning trading at around $1,292.98.

WTI is up 0.31% this morning, trading around $71.86.

FxPro UK Limited is authorised and regulated by the Financial Services Authority, registration number 509956. CFDs are leveraged products that incur a high level of risk and it is possible to lose all your capital invested. Please ensure that you understand the risks involved and seek independent advice if necessary.

Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. FxPro does not take into account your personal investment objectives or financial situation. FxPro makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any employee of FxPro, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of FxPro. This communication must not be reproduced or further distributed without the prior permission of FxPro. Risk Warning: CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all your invested capital. Therefore, CFDs may not be suitable for all investors. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risks involved and take into account your level of experience. Seek independent advice if necessary. FxPro Financial Services Ltd is authorised and regulated by the CySEC (licence no. 078/07) and FxPro UK Limited is authorised and regulated by the Financial Services Authority, Number 509956.