14/ 01/ 2020

Sterling Dives after Poor GDP, Risk on Ahead of US-China Trade Deal

Sterling is sold off broadly yesterday as poor GDP data added to the case of BoE rate cut. Recent comments from BoE officials already suggested that they’re open to easing if data don’t show improvement. The Pound will face more tests from CPI and retail sales later in the week. Yen is following as the second weakest as pressured by surging Germany and US yields. Meanwhile, Swiss Franc and Canadian Dollar the stronger ones so far. Dollar is mixed, awaiting US-China trade deal phase one.

Looking ahead, it’s another quiet day ahead on the economic calendar of Eurozone and UK. The lack of stats from UK will leave Brexit chatter to influence on the day Britain’s departure date rapidly approaches. On the monetary policy front, dovish chatter from BoE MPC members and yesterday’s disappointing stats will test the Pound. December inflation figures due out of the U.S later today. Barring an unexpected pickup in inflationary pressures the numbers are unlikely to have a lasting impact on the Dollar. The focus in the early part of the week will remain on geopolitics as the U.S and China ready to sign the phase 1 trade agreement on Wednesday.

08/ 01/ 2020

Safe Havens Surge as Iran Attacks

The euro declined against the U.S. dollar on Tuesday, as investors cautiously warmed to riskier assets with few signs of a further immediate escalation in tensions between the United States and Iran.

Market players around the globe also reassessed the risk of an all-out conflict between the two countries after the killing of Tehran’s top general in a U.S. air strike on Friday set off a bout of risk aversion.

The British slipped lower against dollar on Tuesday, as the dollar rose, with investors watching British lawmakers’ return to parliament after the Christmas recess in preparation to vote on Prime Minister Boris Johnson’s European Union (EU) withdrawal deal.

07/ 01/ 2020

Tensions between the US and Iran keeping Investors in Cautious Mode

The EUR/USD pair is ending the first day of the week with modest gains, having traded between 1.1153 and 1.1205. Fears dominated the first session of the day, amid persistent tensions between the US and Iran after US President Trump ordered the killing of a top Iranian Commander last Friday. The Euro managed found support during London trading hours on better-than-expected data, as the final versions of Markit output indexes were revised higher. The GBP/USD pair surged to 1.3174, as panic selling stalled mid-European session following encouraging data from different economies, which helped worldwide indexes recover from intraday lows. Meanwhile, UK PM Johnson announced that the UK would conduct post-Brexit trade talks with the US while it negotiates the terms of the future relationship with the EU. This week, EU Commission President, will head to London reportedly to start talks with Johnson.

Looking ahead, economic data from the U.S and Canada will influence, though there will be continued caution as Iran holds back from any immediate retaliation.

06/ 01/ 2020

Week Ahead | Stats, Impeachment, and Brexit to Take a Back Seat as Iran Takes Center Stage

The Euro was little changed against the U.S. dollar on Friday, as dismal economic news from Europe and the UK kept investors cautious. Investor focus has now turned to the minutes of the Federal Reserve’s Dec. 10-11 policy meeting. The British slipped lower against dollar on Friday, as after downbeat data on construction and consumer demand and heightening worries for an economy showing no sign of emerging from Brexit-linked gloom. The pound also fell to a one-month low versus the yen as investors hunkered down in safe-haven assets such as the yen and gold, after a senior Iranian military official was killed in an air strike conducted by the United States.

Tensions between the United States and Iran after President Trump exited the Iran nuclear deal increased in December when an American contractor was killed in Iraq. The US responded by bombing camps of the militia that is said to have killed the contractor. In response, the militia attacked the American embassy in Iraq last week. The killing of Qassem Soleimani, an influential military officer, means that the crisis in the Middle East will continue.

Economic data will likely take a back seat today as the market focus remains squarely on Iran, the Middle East, and the Oval Office.