GBP/USD Forecast: Levels to Watch, Crude Oil Prices Plunge - US Market Open
GBP: Today’s stellar PMI report will likely see the Bank of England refrain from lowering interest rates at the January meeting. In the wake of the release the Pound came under pressure in a “buy the rumour, sell the fact” type fashion with market participants anticipating a better than expected release amid the recent sentiment surveys (CBI). That said, money markets are little changed a still price in a 50% likelihood of a cut, which in turn could see the Pound push higher if the BoE stands pat on policy. Although, gains are may be somewhat limited with the BoE likely to remain cautious.
EUR: While German PMIs further echoed the stabilisation in Eurozone data, this was brushed aside with the Euro continuing to edge lower. In the near-term, focus will be on Italy, where a regional election could see political uncertainty pick up once again in the region.
Crude Oil: Oil prices have continued to decline and is on course for its largest drop since September 2018. Supply disruption risks from Libya and OPEC jawboning have thus far failed to provide support as concerns over easing jet fuel demand stemming from the coronavirus outbreak persists. That said, while the impact of coronavirus on the oil market is difficult to assess, focus will be on China’s ability to contain the virus.
Source: DailyFX, Refinitiv
Economic Calendar (24/01/20)
WHAT’S DRIVING MARKETS TODAY
- “British Pound (GBP) Latest: Strong UK PMIs Support Positive GBP/USD Outlook” by Nick Cawley, Market Analyst
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- “Euro Dollar Forecast: EUR/USD Risks to Resurface Amid Weekend Italian Election” by Justin McQueen, Market Analyst
--- Written by Justin McQueen, Market Analyst
Follow Justin on Twitter @JMcQueenFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.