Previous Day's Market Highlights
The main focus for sterling traders was yesterday’s budget, delivered by the Chancellor. The main factor driving markets after the statement was the downwards revision of official GDP forecasts for the next 5 years, all were revised down by around 0.4%, causing a drop of around 30 pips across the board for the pound. Despite this, the budget passed without causing significant market volatility.
Macro data from the US disappointed in the last trading session before Thanksgiving, with Durable Goods Orders missing the 0.4% forecast to print -1.2% for the month of October. This was the catalyst for broad US dollar weakness in the afternoon session which, along with an uninspiring set of FOMC meeting minutes, pushed Cable above 1.33 and EUR/USD back above 1.18.
This represents 8 straight days of gains for Cable, with the pairing now trading at levels seen before the Bank of England meeting on 2 November. Focus will now be on whether the pairing can push beyond resistance at 1.3380 and onwards towards the 1.35 levels seen earlier this year.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
|GBP / EUR||1.1249||1.1451||1.1092||3.14%|
|GBP / USD||1.3312||1.3321||1.3039||2.12%|
|EUR / USD||1.1836||1.1858||1.1553||2.57%|
|GBP / NZD||1.9343||1.9501||1.8787||3.66%|
|GBP / CAD||1.6902||1.7171||1.6589||3.39%|
Today's Market Highlights
A public holiday in Japan and the start of Thanksgiving weekend in the US heralds a day of thinner liquidity and possibly quieter markets. Focus therefore shifts towards the Eurozonewith the release of manufacturing and services PMI figures this morning. French figures have already been released, causing slight euro strength, with figures from Germany and the Eurozone as a whole to follow at 9AM. All are forecast to show expansion in the respective economic sectors.
Sterling traders will focus on the 2nd estimate of the UK Q3 GDP figure, released at 9:30 this morning. The preliminary reading of 0.4% is expected to remain unchanged, therefore market movement is only to be expected if the print differs from the preliminary reading.
The afternoon session is expected to be quiet, with only Canadian core retail sales data of note (previous -0.7%, forecast 0.9%). The BoC will be closely watching this data as they determine the trajectory of their rate hike cycle after unexpectedly hiking rates in September. Another negative reading would likely see Canadian dollar weakness.