Caxton Morning Report: Sterling Falls on Dovish Carney

While the day’s economic calendar was fairly light, the pound was in focus as formal Brexit negotiations began. Any negative developments in the negotiations would pose a risk to the pound. Exit terms will be agreed before a trade deal.

Previous Day's Market Highlights

While the day’s economic calendar was fairly light, the pound was in focus as formal Brexit negotiations began. Any negative developments in the negotiations would pose a risk to the pound. Exit terms will be agreed before a trade deal.
 
Sterling picked up yesterday morning, before easing lower throughout the rest of the day. Sterling-dollar met resistance above 1.2800.
 
The dollar was better bid against both the euro and the pound. Sterling-dollar fell towards 1.2700 and euro-dollar temporarily broke back below 1.1150. 

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1427 1.1624 1.1277 2.99%
GBP / USD 1.2741 1.3003 1.2635 2.83%
EUR / USD 1.1150 1.1296 1.1109 1.66%
GBP/AUD 1.6743 1.7494 1.6684 4.63%
GBP / NZD 1.7561 1.8569 1.7442 6.07%
GBP / CAD 1.6838 1.7572 1.6796 4.42%

Today's Market Highlights

Sterling weakened this morning to one-week lows as BoE Governor Carney gave his rescheduled Mansion House speech, striking a dovish tone as he said it is not yet time to begin tightening policy. Sterling-euro fell below 1.1400 and sterling-dollar fell below 1.2700. Both rates were down over 0.6%.    
 
A relatively quiet afternoon includes Canada’s Wholesale Sales (13:30 BST) and the Global Dairy Trade Price Index.
 
Fed Member Kaplan speaks this evening at the Commonwealth Club in San Francisco (20:00 BST). According to the CME FedWatch Tool, markets are currently pricing in a 50% chance that the Fed will hike rates in December.

Today's Economic Calendar

Time Currency Release Consensus Previous
08:30 GBP BoE Governor Carney Speaks
13:30 USD Current Account (Q1) $-123.8B $-112.4B
13:30 CAD Wholesale Sales MoM (Apr) 0.6% 0.9%
NZD Global Dairy Trade Price Index 0.6%
20:00 USD Fed Member Kaplan Speaks