News & Analysis
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January’s retail sales report suggests that UK consumers are joining in the burst of optimism experienced by businesses in the new year.
The Japanese yen was utterly routed yesterday, and with its losses continuing this morning USDJPY is trading 2% higher than Tuesday’s lows. The weakness makes sense in the wider context of Japan’s macro-economy.
Today’s CPI release saw headline inflation overshoot expectations by 0.1 percentage points to post a print of 2.4% in January – the highest reading in 15 months. However, the loonie’s reaction was relatively muted.
The euro tumbled further yesterday as German ZEW economic sentiment slumped to 8.8 in February compared to the 21.5 consensus. EURUSD reached its lowest level since April 2017 in the hours after the release.
Sterling began to lose ground yesterday, with its losses accelerating this morning as the US dollar gained against most currencies. Some of the recent losses in sterling may be attributable to a combative speech in Brussels by David Frost.
The Federal Reserve fund futures prices show that markets are expecting more easing from the Fed this year, probably as a result of the macroeconomic impact of the coronavirus outbreak.
Sajid Javid’s resignation as Chancellor of the Exchequer last week triggered a rally in sterling, as markets began to speculate that his departure suggested an increased likelihood of fiscal stimulus from Boris Johnson’s government.
Last week, the single currency breached its 33-month low against the US dollar due to weak economic data and coronavirus fears. In the data, industrial production figures for December were especially disappointing. They came after January’s PMI surveys had suggested...
With the US enjoying the Presidents’ day holiday today the dollar is trading with low volatility to most major currencies. EM currencies are in the green after the Chinese central bank lowered one year lending rates and offered medium term lending facilities to borrowers.
The greenback saw another swathe of strength yesterday as a new methodology in spotting virus infections in China caused not only 14,480 more cases to be diagnosed, but also a risk-off rally as fears of a more entrenched outbreak rippled through markets.