Previous Day's Market Highlights
The pound extended gains yesterday, rising to a three-week high against the euro and a two-month high against the dollar. Sterling-euro traded above 1.1300 and sterling-dollarbroke above 1.3400. Signs of progress continued to support sterling following Tuesday’s reports that of an agreement over the divorce bill and additional reports that the UK may be nearing a deal on the Irish border.
These gains saw sterling hit its highest levels since June against the Canadian dollar, since last September—and in turn around the highest since the EU referendum—against the Aussie dollar, and since the EU Referendum against the kiwi dollar. The kiwi fell further on a drop in business confidence.
Despite the signs of progress, Brexit negotiations remain a downside risk to the pound given significant remaining uncertainties, and signs of contention could again weaken sterling.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
|GBP / EUR||1.1341||1.1406||1.1092||2.75%|
|GBP / USD||1.3456||1.3481||1.3039||3.28%|
|EUR / USD||1.1864||1.1961||1.1553||3.41%|
|GBP / NZD||1.9665||1.9699||1.8787||4.63%|
|GBP / CAD||1.7330||1.7342||1.6589||4.34%|
Today's Market Highlights
In the morning, the euro will be in focus, with the Unemployment Rate forecast to hold below 9% and Core CPI to pick back up above 1.0% (10:00 GMT). These gains could strengthen the euro as a stronger economy and signs of rising inflation support the argument for normalising monetary policy, although inflation remains below target.
PCE, income, and spending figures are the main releases this afternoon (13:30 GMT). Gains could strengthen the dollar but may have limited impact barring any surprises. Other US releases include weekly Initial Jobless Claims, forecast to remain broadly unchanged if a touch higher, and the Chicago Purchasing Managers’ Index, forecast to slow (13:30, 14:45 GMT).
As for the pound, it will be closely watched for whether it can further extend gains or sees a pullback. Politics will also remain in focus: in the UK, should there be any additional Brexit headlines, and in the US should there be any developments in tensions with North Korea or in the Senate’s tax bill debate.
Today's Economic Calendar
|10:00||EUR||Eurozone Unemployment Rate (Oct)||8.9%||8.9%|
|10:00||EUR||Preliminary CPI YoY (Nov)||1.6%||1.4%|
|10:00||EUR||Preliminary Core CPI YoY (Nov)||1.1%||0.9%|
|10:00||EUR||ECB's Praet Speaks|
|13:30||USD||Personal Spending (Oct)||0.3%||1.0%|
|13:30||USD||Personal Income MoM (Oct)||0.3%||0.4%|
|13:30||USD||Personal Consumption Expenditure - Price Index YoY (Oct)||1.5%||1.6%|
|13:30||USD||Core PCE - Price Index YoY (Oct)||1.4%||1.3%|
|13:30||USD||Initial Jobless Claims (24 Nov)||240K||239K|
|13:30||CAD||Current Account (Q3)||-19.50B||-16.32B|
|14:45||USD||Chicago Purchasing Managers' Index (Nov)||63.0||66.2|
|18:00||USD||Fed Member Kaplan Speaks|
|AUD||HIA New Home Sales MoM (Oct)||-6.1%|
|01:45||CNY||Caixin Manufacturing PMI (Nov)||50.9||51.0|