12th June 2018-Caution ahead of Fed and ECB meetings limited activity with narrow ranges

 

     

Caution ahead of Fed and ECB meetings limited activity with narrow ranges

Euro-zone contagion fears eased following reassuring rhetoric from Italian officials which helped protect the Euro, although EUR/USD failed to hold gains amid limited dollar gains.

Caution ahead of Fed and ECB meetings limited activity with narrow ranges as trade tensions lost market influence slightly.

Risk conditions held firm amid positive rhetoric from the Trump-Kim meeting and the yen lost ground with global equities also making limited net gains.

Sterling was undermined by weak industrial data and on-going political uncertainty.

UK industrial production declined 0.8% for April compared with expectations of a small gain. Manufacturing output declined 1.4% on the month, the weakest performance for over five years which held the annual increase to 1.4% from 2.9. Construction data was also weaker than expected while the trade deficit was wider than expected with an April goods deficit of £14.0bn.

Weaker than expected releases across all metrics undermined growth expectations and triggered sharp Sterling losses. GBP/USD declined to lows just below 1.3350 as EUR/GBP peaked close to 0.8830.

The NIESR data was also weaker than expected with estimated GDP growth of 0.2% in the three months to May from 0.1% previously. Sterling gained some support from a recovery in oil prices and gilts still registered net losses during the day with yields increasing. In this environment, there was a limited GBP/USD recovery to the 1.3380 area as GBP/EUR retreated to near 1.1320.

Political uncertainty remained an important factor with Prime Minister May looking to avoid defeats in this week’s House of Commons Brexit votes. There was also caution ahead of employment and inflation data due on Tuesday and Wednesday respectively with GBP/USD edging lower to re-test 1.3350 against a firm dollar in early Europe.

 

     
 
       
 

GBP/EUR 

– 1.1355

 
 

GBP/USD

– 1.3365

 
 

GBP/CHF 

–  1.3192

 
 

GBP/JPY 

– 147.46

 
 

GBP/AUD 

– 1.7547

 
 

GBP/NZD 

– 1.8978

 
 

GBPCAD

– 1.7361

 
 

GBP/ZAR 

– 17.6028

 
 

GBP/NOK 

– 10.7509

 
 

GBP/SEK 

– 11.5819

 
 

EUR/USD 

– 1.1769

 
       
  All rates are indicative of interbank rates*  
       
 
 

GBP/EUR

 
 

GBP/USD 

 
 

EUR/USD 

 
       
 
   

09:30 GBP

UK Claimant Count Change (M/M)

7.8K

31.2K

 
   

10:00 EUR

German ZEW Survey (Economic Sentiment)

-13

-8.2

 
   

13:30 USD

US CPI (Y/Y)

2.70%

2.50%

 
   

13:30 USD

US CPI Ex Food & Energy (Y/Y)

2.20%

2.10%

 
 
   
 
 
*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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