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Real Time News
  • The rest of the New York trading session is absent major scheduled event risk with US markets closed for the Martin Luther King Jr holiday. There is always a risk of unscheduled developments
  • Commodities Update: As of 17:00, these are your best and worst performers based on the London trading schedule: Silver: 0.50% Gold: 0.41% Oil - US Crude: -0.55% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/eXSdZgvVeB
  • Despite China's better-than-expected 6.5% 4Q GDP report, $USDCNH is still up on the day. There is strong external influence on this rate, but Dollar still exerts the greater pressure. If it breaks 6.50 and Biden keeps pressure on China trade, I'll be watching https://t.co/5W5tcfeTZ5
  • Forex Update: As of 17:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.19% 🇨🇭CHF: 0.05% 🇪🇺EUR: -0.02% 🇨🇦CAD: -0.16% 🇦🇺AUD: -0.25% 🇳🇿NZD: -0.28% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/BrmnTuolx0
  • The Capitol of the United States has been temporarily shut down ahead of President-Elect Biden's inauguration out of caution
  • Another Dollar pair on my radar is $USDCHF. Its 20-day day correlation coefficient to EURUSD is -0.90 (very strong negative). If the latter's break is sustained, both have appeal. If it stalls (soon), USDCHF is still abiding its resistance which supports establishing levels https://t.co/Pcre3xCbYd
  • Indices Update: As of 17:00, these are your best and worst performers based on the London trading schedule: US 500: 0.13% France 40: 0.11% Germany 30: 0.09% Wall Street: 0.07% FTSE 100: 0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/ZXdpvpEJJ3
  • Germany's central bank (Bundesbank) warned earlier today in its monthly report that if the government extended its Covid lockdown, the country could suffer "a sizeable setback"
  • The US Dollar Index rallied more than 0.6% this week marking the second consecutive weekly advance. Get your $USD update from @MBForex here: https://t.co/hVshzMbc31 https://t.co/LG0HG9fQ4c
  • There are a few Dollar pairs that have offered up a provocative, tentative technical break to suggest a reversal is possible. EURUSD is the top of my list to watch but $NZDUSD is of interest as well with many kiwi crosses offering similar view https://t.co/Ss74IIOdc7
Forex: Pound Unlikely to Stir on CPI, Fiscal Cliff Chatter Key

Forex: Pound Unlikely to Stir on CPI, Fiscal Cliff Chatter Key

Ilya Spivak, Head Strategist, APAC

The British Pound is unlikely to see lasting response to steady inflation data. Forex markets remain focused on chatter surrounding “fiscal cliff” negotiations.

Talking Points

  • British Pound Likely to Look Past Steady UK Inflation Data Set
  • RBA Minutes Link Rate Cut to Softening Labor Market Outlook
  • Aussie, NZ Dollars May Recover as S&P 500 Futures Rise in Asia

November’s UK Consumer Price Index report headlines the economic calendar in European trading hours. Expectations suggest the benchmark inflation rate will hold unchanged at 2.7 percent. Steady year-on-year PPI and RPI readings over the same period are seen reinforcing well-anchored price-growth trends. This suggests the data set is unlikely to materially unhinge the wait-and-see posture at the Bank of England, at least in the near term. As such, the response from the British Pound is likely to be fairly muted absent a major deviation from economists’ forecasts.

Minutes from December’s Reserve Bank of Australia policy meeting said the central bank saw a softening labor market as giving scope for its latest 25bps interest rate cut. The central bank added that resource-sector investment was nearing a peak while the inflation outlook afforded scope for easier policy to support demand. Traders now price in a 63 percent probability of another rate cut in February. Meanwhile, Chinese FDI fell 5.4 percent in November compared with a year prior, marking deterioration after October’s 0.24 percent decline.

The Australian and New Zealand Dollars underperformed in overnight trade, down as much as 0.2 each against their top counterparts (on average). A uniquely identifiable catalyst seemed absent. Weakness may prove limited as S&P 500 index futures point higher in late Asian trade, hinting supportive risk appetite trends may underpin a recovery in the sentiment-linked currencies. On-going US “fiscal cliff” negotiations remain a wildcard, with news-flow indicative of an emerging accord likely to boost the risk-on mood and weigh on the US Dollar (and vice versa).

Asia Session: What Happened

GMT

CCY

EVENT

ACT

EXP

PREV

23:00

AUD

Conference Board Leading Index (OCT)

0.2%

-

-0.4% (R-)

0:30

AUD

RBA December Meeting Minutes

-

-

-

2:00

CNY

Actual FDI (YoY) (NOV)

-5.4%

-3.1%

-0.2%

5:30

JPY

Nationwide Department Store Sales (YoY) (NOV)

2.2%

-

-2.4%

5:30

JPY

Tokyo Department Store Sales (YoY) (NOV)

3.1%

-

-1.5%

Euro Session: What to Expect

GMT

CCY

EVENT

EXP

PREV

IMPACT

9:30

GBP

PPI Input n.s.a. (MoM) (NOV)

0.1%

0.4%

Low

9:30

GBP

PPI Input n.s.a. (YoY) (NOV)

-0.1%

0.1%

Low

9:30

GBP

PPI Output n.s.a. (MoM) (NOV)

0.2%

0.1%

Medium

9:30

GBP

PPI Output n.s.a. (YoY) (NOV)

2.5%

2.5%

Medium

9:30

GBP

PPI Output Core n.s.a. (MoM) (NOV)

0.1%

0.1%

Low

9:30

GBP

PPI Output Core n.s.a. (YoY) (NOV)

1.5%

1.4%

Low

9:30

GBP

Retail Price Index (NOV)

246.2

245.6

Low

9:30

GBP

Retail Price Index (MoM) (NOV)

0.2%

0.6%

Medium

9:30

GBP

Retail Price Index (YoY) (NOV)

3.2%

3.2%

Medium

9:30

GBP

RPI Ex Mort Int.Payments (YoY) (NOV)

3.1%

3.1%

Low

9:30

GBP

ONS House Prices (YoY) (OCT)

-

1.7%

Low

9:30

GBP

Consumer Price Index (MoM) (NOV)

0.2%

0.5%

High

9:30

GBP

Consumer Price Index (YoY) (NOV)

2.7%

2.7%

High

9:30

GBP

Core Consumer Price Index (YoY) (NOV)

2.7%

2.6%

High

10:00

EUR

Italian Current Account (€) (OCT)

-

-2581M

Low

Critical Levels **

CCY

SUPPORT

RESISTANCE

EURUSD

1.3120

1.3212

GBPUSD

1.6166

1.6254

** Levels are derived from Pivot Points

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

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