Busy Week Ahead After Sterling Pares Gains

Sterling pared gains on Friday. This week is set to be a busy one with focus on data, central banks, and politics.

Previous Day's Market Highlights

Sterling pared gains on Friday as investors took profit after an initial move higher on the UK’s divorce deal agreement. Of note, GBP/EUR briefly hit 1.1500 for the first time since 8 June, later pulling back more than 1.0% to fall below 1.1400. GBP/USD reversed highs above 1.3500 to fall back towards 1.3350.
 
Mixed manufacturing and industrial production data had limited effect on the pound as production slowed m/m but accelerated y/y.  
 
The dollar softened as wage growth figures missed projections, rising 2.5% y/y versus the 2.7% forecast. This outweighed an above-forecast NonFarm Payrolls figure, which found the US added 228K jobs in November. The Unemployment Rate held at 4.1%.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1361 1.1509 1.1092 3.62%
GBP / USD 1.3387 1.3550 1.3076 3.50%
EUR / USD 1.1783 1.1961 1.1637 2.71%
GBP/AUD 1.7793 1.7999 1.7078 5.12%
GBP / NZD 1.9333 1.9836 1.8883 4.80%
GBP / CAD 1.7189 1.7468 1.6589 5.03%

Today's Market Highlights

The calendar gets off to a quiet start today with no major releases, but the calendar is significantly busier the rest of the week. Politics, particularly Brexit headlines, will remain in focus ahead of this week’s EU Summit, starting Thursday.
 
On Tuesday, the UK releases November CPI. This is followed by the latest employmentand wage data on Wednesday and Retail Sales figures on Thursday. The US releases CPI and Retail Sales figures mid-week. Mid-level releases from the Eurozone include Economic Sentiment and Trade Balance.
 
It is also a busy week for central banks. The Fed is expected to hike interest rates by 25 basis points when it meets on Wednesday. Given that this has been priced in, the dollar’s movement will instead be guided by the forward guidance for 2018 policy. The BoE and ECB are expected to keep policy steady when both banks announce their latest decisions on Thursday.

Today's Economic Calendar

Time Currency Release Consensus Previous
15:00 USD JOLTS Job Openings (Oct) 6.090M 6.093M
AUD HIA New Home Sales MoM (Oct) -6.1%
00:30 AUD Mid-Year Economic and Fiscal Outlook
00:30 AUD House Price Index QoQ (Q3) 0.5% 1.9%
00:30 AUD House Price Index YoY (Q3) 10.2%