12th February 2018 -Sterling came under pressure following tough comments from EU chief Brexit negotiator Barnier

 

     

Sterling came under pressure following tough comments from EU chief Brexit negotiator Barnier

Equity markets have remained the dominant focus. US markets came under significant pressure before a late recovery as key technical support held. US gains also underpinned Asian equities on Monday and helped oil prices recover as risk appetite stabilised.

The yen and Swiss franc gained support as equities came under pressure before a modest reversal on Monday as the dollar failed to hold its best levels despite a fresh increase in yields as EUR/USD also recovered ground.

Sterling came under pressure following tough comments from EU chief Brexit negotiator Barnier which offset Thursday’s hawkish Bank of England statement.

UK industrial production declined 1.3% for December compared with consensus forecasts of a 0.9% fall as output was undermined by the decline in crude oil output while manufacturing output increased 0.3% on the month, in line with market expectations. The NIESR estimated GDP growth of 0.5% in the three months to January from 0.6% previously.

Sterling dipped weaker following the data and there was more concerted pressure ahead of the US open as political stresses increased again. EU Chief Brexit Negotiator Barnier stated that substantial disagreements remained and that a transition deal is not a given if disagreements persist. His overall rhetoric was notably hard-line with the UK needing to accept all EU terms during a transition period. GBP/USD dipped to 3-week lows near 1.3760 following Barnier’s rhetoric while GBP/EUR advanced to highs around 1.1440.

Sterling recovered some ground later in US trading as equities recovered ground and risk aversion faded slightly, although the currency remained vulnerable to position adjustment.

Bank of England chief economist Haldane stated that there was no rush to raise interest rates and the latest Visa data reported a 1.2% annual decline in consumer spending for January, although Sterling held steady on Monday with GBP/EUR near 1.1275.

     
 
       
 

GBP/EUR 

– 1.1275

 
 

GBP/USD

– 1.3845

 
 

GBP/CHF 

– 1.2992

 
 

GBP/JPY 

– 150.39

 
 

GBP/AUD 

– 1.7705

 
 

GBP/NZD 

– 1.9083

 
 

GBP/CAD

– 1.7400

 
 

GBP/ZAR 

– 16.5310

 
 

GBP/NOK 

– 11.9965

 
 

GBP/SEK 

– 11.1751

 
 

EUR/USD 

– 1.2277

 
       
  All rates are indicative of interbank rates*  
       
 
 

GBP/EUR

 
 

GBP/USD 

 
 

EUR/USD 

 
       
 
   

08:15 CHF 

Swiss CPI (M/M)

-

0.00%

 
   

08:15 CHF

Swiss CPI (Y/Y)

-

0.80%

 
   

19:00 USD

BoE Rate Decision

0.50%

0.50%

 
   

-

-

-

-

 
 
   
 
 
*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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