Home > Resource Hub > Daily Market News > Crude offsets Sterling’s cabinet woes

Crude offsets Sterling’s cabinet woes

Crude offsets Sterling’s cabinet woes

GBP
Sterling gained support from a rise in oil prices after Brent crude hit the highest level since May 2015. Expectations that a transitional Brexit deal would be agreed in 2018 and global economic optimism was also a significant factor in shoring up the Pound. EU chief negotiator Barnier stated that the risk of a disorderly Brexit had decreased with the UK ready to take responsibility for its choice. There were, however, warnings that German opposition could disrupt trade talks.

The Pound found support above 1.3500 against the Dollar while the Euro declined to lows just below 1.1350. The latest British Chambers of Commerce Quarterly Economic Survey survey indicated that the economy was set for an underwhelming 2018 with businesses in a subdued mood ahead of Brexit and reluctant to invest, and Sterling edging lower ahead of the latest UK industrial and manufacturing production data.

USD

It was a limited day for the Dollar yesterday in terms of economic data releases. Instead, following recent surges in US Treasury Yields on the positive sentiment towards the Fed rate hike programme, investors and traders continue short covering their positions. This has lead to a rise for the Dollar across the board as Cable hit a daily low of 1.3509 and a low of 1.1918 against the Euro.

Of the limited data, The US NFIB small business optimism decreased to 104.9 but still holds a strong reading whilst US JOLTS job openings fell to 5.88 million for November. Further, Minneapolis Fed Neel Kashkari believes inflation will continue to remain low and be the main concern for monetary policy going forward.

Again, today is a quiet day for the Dollar in terms of economic data.

EUR

The Euro is trading lower today, having failed to hold the 1.20 level versus the Dollar, despite solid economic data.

Germany reported a solid 3.4% gain in industrial production in the month of November (far exceeding forecasts of a 1.8% rise), and a wider trade surplus in the same month on a 4.1% gain in exports. Unemployment across the Eurozone also continued to fall last month to 8.7%, its lowest level in almost nine years.

Data To Watch:
09:30 GBP Industrial Production (MoM) (YoY) (Nov)
09:30 GBP Manufacturing Production (MoM) (YoY) (Nov)
n/a EUR 10-y Bond Auction
13:00 GBP NIESR GDP Estimate (3M) (Dec)
n/a USD 10-Year Note Auction
18:30 USD Fed’s Bullard speech

Share this case study
Set yourself up in minutes, make payments the same day: it’s free, easy and without obligation.