10th January 2018 - Sterling gained support from fresh gains in oil prices and optimism surrounding global economy

 

     

Sterling gained support from fresh gains in oil prices and optimism surrounding global economy

Economic data releases had little impact, although there was significant selling pressure on bonds with US 10-year yields above 2.55% and the highest level since March 2017.

The dollar held a firm tone overall as yields increased with the Euro drifting weaker, although speculation over Bank of Japan policy normalisation continued to boost the yen with USD/JPY dipping below 112.00.

Oil prices made strong gains with WTI hitting 3-year highs close to $63.50 p/b as expectations of strong demand were enhanced by a larger than expected API inventory draw.

On economic grounds, the UK currency gained support from fresh gains in oil prices and optimism surrounding the global economy.

Sterling was underpinned to some extent by expectations that a Brexit transition deal would be agreed this year. EU chief negotiator Barnier stated that the risk of a disorderly Brexit had decreased with the UK ready to take responsibility for its choice. There were, however, also concerns that Germany would block an advantageous UK trade deal.

GBP/USD was able to find support above 1.3500 while GBP/EUR settled around 1.1350.

The latest BCC survey indicated that the economy was set for an underwhelming 2018 with businesses in a subdued mood ahead of Brexit and reluctant to invest. Sterling edged lower ahead of the latest industrial production data with GBP/EUR around 1.1350.

     
 
       
 

GBP/EUR 

– 1.1316

 
 

GBP/USD

– 1.3508

 
 

GBP/CHF 

– 1.3270

 
 

GBP/JPY 

– 151.20

 
 

GBP/AUD 

– 1.7260

 
 

GBP/NZD 

– 1.8822

 
 

GBP/CAD

– 1.6835

 
 

GBP/ZAR 

– 16.7591

 
 

GBP/NOK 

– 10.8943

 
 

GBP/SEK 

– 11.1104

 
 

EUR/USD 

– 1.1939

 
       
  All rates are indicative of interbank rates*  
       
 
 

GBP/EUR

 
 

GBP/USD 

 
 

EUR/USD 

 
       
 
   

09:30 GBP

Industrial Production (Y/Y)

3.50%

3.60%

 
   

13:00 GBP

UK NIESR GDP Estimate

-

0.50%

 
   

14:00 USD

Fed President Evans Speaks

-

-

 
   

18:30 USD

FOMC Member J. Bullard Speaks

-

-

 
 
   
 
 
*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time.  CentralFX are not responsible for the rates shown.
 
 
 

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