Market slows amid Covid fallout
Yesterday the main FX pairs were confined to narrow trading bands on the exchanges amid a sparse data schedule and traders concerns regarding Covid-19 newsflow. Of the limited moves to register, the euro handed back some of the ground it made earlier in the week.
As we get underway this morning, we have already seen data from the UK that shows that GDP rose by just 0.1% in October, well below the +0.5% forecast. Industrial production was also below the forecast, falling by 0.6% (+0.1% f’cast), although neither has had an impact on early trading. Rate wise, EUR/USD opened back below the $1.13 threshold, EUR/GBP is operating down below the midpoint of 85-86p and GBP/USD continues to change hands around the $1.32 mark.
Looking ahead to today, US CPI inflation data is due. A rise is forecast, despite already elevated levels – 30 year highs. Elsewhere in the US, consumer sentiment (December) is expected to remain subdued. Once again, Covid-19 newsflow is likely to be the key driver for traders today.