16th May 2018-Dollar strength dominated later in the day with GBP/USD declining to fresh 4-month lows

 

     

Dollar strength dominated later in the day with GBP/USD declining to fresh 4-month lows

US Treasuries moved sharply lower on the day with the 10-year yield rising to 7-year highs around 3.08% following a solid reading for US retail sales.

Higher yields provided renewed dollar support with the currency index at fresh 4-month highs as USD/JPY broke above the 110.00 level while European currencies lost ground on subdued sentiment.

Oil prices traded close to 3-year highs despite dollar gains, but gold fell sharply to 4-month lows due to a combination of dollar gains and higher bond yields.

Equity markets lost ground, although with limited losses.

UK labour-market data was mixed with little overall market impact. The headline increase in average earnings was slightly below consensus forecasts at 2.6% from 2.8% previously, although the underlying figure was in line with expectations at 2.9%. The unemployment rate held at 4.2%, the lowest reading for 42 years while the employment increase was larger than expected.

The data reinforced evidence of a tightening labour market, but with no increase in pressure on the Bank of England to raise interest rates quickly and Sterling was unable to make significant headway.

Dollar strength dominated later in the day with GBP/USD declining to fresh 4-month lows near 1.3450. There was, however, a recover to the 1.3500 area and GBP/EUR rallied towards 1.1420 as the UK currency gained support from short covering. A firm tone in oil prices and higher UK yields also helped underpinned Sterling sentiment with GBP/USD holding steady just above 1.3500 on Wednesday.

     
 
       
 

GBP/EUR 

– 1.1417

 
 

GBP/USD

– 1.3509

 
 

GBP/CHF 

– 1.3510

 
 

GBP/JPY 

– 148.97

 
 

GBP/AUD 

– 1.8076

 
 

GBP/NZD 

– 1.9648

 
 

GBP/CAD

– 1.7379

 
 

GBP/ZAR 

– 17.0255

 
 

GBP/NOK 

– 10.9710

 
 

GBP/SEK 

– 11.7506

 
 

EUR/USD 

– 1.1829

 
       
  All rates are indicative of interbank rates*  
       
 
 

GBP/EUR

 
 

GBP/USD 

 
 

EUR/USD 

 
       
 
   

10:00 EUR

Euro-Zone Core CPI (Y/Y)

-

1.00%

 
   

10:00 EUR

Euro-Zone CPI (Y/Y)

1.20%

1.20%

 
   

13:00 EUR

ECB President Mario Draghi's Speech

-

-

 
   

15:30 USD

US Crude Oil Inventories

-

-2.19M

 
 
   
 
 
*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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