Forex Today: Trade optimism lifts mood, pound pressured by the BOE, Iran still eyed

Yohay Elam FXStreet

Here is what you need to know on Monday, January 13:

The mood in financial markets is upbeat as Chinese Vice Premier Liu He leads a delegation to Washington. He is set to sign Phase One of the trade deal and investors are already eyeing the second phase. Markets are awaiting the details of the accord. Steven Mnuchin, the US Treasury Secretary, has suggested reviving the Bush-era strategic talks with Beijing. Commodity currencies are on the rise and the yen remains under pressure.

The British pound is under pressure after Gertjan Vlieghe, a member of the Bank of England, opened the door to cutting interest rates – data-dependent. His comments join dovish remarks from Governor Mark Carney and keep the pressure on sterling.

UK monthly Gross Domestic Product data for November is set to show a second consecutive month of stagnation.

The greenback remains under pressure after unimpressive jobs report for December. The world's largest economy gained only 145,000 jobs and wage growth decelerated to 2.9%. Later this week, inflation, retail sales, and consumer confidence are awaited. See US Job creation slows in 2019 on manufacturing decline and trade

Iran: Protests have rocked the Middle-Eastern nation after the leadership admitted to shooting down the Ukranian passenger plane that crashed last week. Iranian-backed Iraqi militias have vowed to take revenge after the killing of some of their leaders. Tensions remain elevated and oil prices may react to the news.

The Canadian dollar is holding onto gains after a better-than-expected jobs report. The Bank of Canada is scheduled to release its quarterly Business Outlook Survey later today.

Cryptocurrencies have been looking for a new direction with Bitcoin hovering above $8,000.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.