Angus Campbell

Sterling fails to gain traction after good employment data

Tomorrow's Scottish referendum is dominating trade in sterling today as normally you would expect a bounce in GBPUSD following such a strong employment reading for the UK . Before the release of the data which showed unemployment falling from 6.4% to 6.2%, better than the expected fall to 6.3%, GBPUSD was trading some 35 pips above the 1.6300 level but we've retreated back from there since the release of the data. Investors and traders are still nervous about tomorrow's vote which hangs in ...

Simon Smith

UK CPI in line but sterling remaining weak

Sterling feeling heavy during the early European session, but weaker tone holding in place after the latest CPI data shows headline rate remaining weaker at 1.5%. Cable at 1.6175, with EURGBP at 0.8000. Scotland referendum on Thursday clearly the main risk event of the week, with sterling volatility guaranteed early Friday when the results are expected to start filtering through.

Simon Smith

More Aussie weakness

We talked about the weakness in the Aussie overnight in the wake of the latest labour market numbers. This has continued during the European session, even though other currencies have managed to gain some ground vs. the dollar. The Aussie is now at levels last seen late March, with a brief push below the 0.91 level into the European session.

Simon Smith

Payrolls weaker

The dollar weaker after US payrolls report was weaker than expected on the headline measure. The 142k headline gain was below the 230k anticipated increase. The rate declined to 6.1%. As always, there are different ways to cut the report. Hourly earnings growth remains weak at 2.1%, whilst the participation rate fell once again to 62.8%. The initial gains on EURUSD are now running out of steam, with USDJPY just holding below the 105.00 level.

Simon Smith

ECB reaction and press conference

The reaction in the FX markets to a mere 10bp cut in interest rates reflects 2 things. Firstly, that this was generally unexpected by the markets. Secondly, a perception that the ECB is more aware of the deflationary risks facing the eurozone economy and prepared to do whatever it takes to ensure that they do not come to fruition. Further losses on EURUSD possible if we see fresh indications that the ECB is preparing to push ahead with asses purchases of some sort or another.

Simon Smith

GBP erasing early gains

Sterling started the new month on decent form, but has since seen some of the early gains erased after weaker than expected PMI data pushed cable away from the day's highs. Cable down from intra-day high of 1.6644, having moved above 1.6600 at the start of the European session.

Simon Smith

Euro weakening on data

EURUSD weakening into midday as data falls to the weaker side and the softer tone to the dollar seen earlier on in the session proves transitory (most against the Aussie and sterling). German labour market data was weaker, with (more significantly) revisions also showing higher unemployment than before. Italian business confidence fell to 95.7, with Eurozone confidence data also softer vs. expectations. EURUSD now back below the 1.32 level with cable at 1.6580. FX likely to remain slightly ...

Simon Smith

Dollar steady after consumer confidence data

The US dollar holding steady after stronger than expected consumer confidence data in the US. We've seen the headline rate move up to 92.4 (from 90.3), with this representing a near seven year high on the headline index. EURUSD has been choppy within a relatively tight range, with the Aussie pushing higher and sterling unsuccessfully trying to do the same.

Simon Smith

Dollar slightly firmer on Yellen

The world and his wife were looking for Yellen to be dovish at her key speech today. As such, it the dollar has bounced a little after the initial headlines. Even though the Fed Chair said that the FOMC see significant under-use of labor resources, this was not sufficient to knock the dollar lower. EURUSD down to 1.3250, Aussie down to 0.9300.

Simon Smith

Holding tight ranges but better US data

We've seen some better US data this afternoon, but the dollar has held a tight range for the most part, with some weakness seen against the yen and Aussie. But what we are seeing is better data on housing continuing, with Existing Home sales this afternoon coming through and rising a firmer than expected 2.4%. For what it's worth, Philly Fed data was also firmer than expected, rising at the fastest pace since early 2011. For now, it seems that markets have settled down, waiting for Friday and ...

Simon Smith

Two MPC members vote for UK rate rise

Sterling up around 30 pips initially after minutes to Aug MPC minutes show two members voting for higher rates. Once again, the currency faces another conflicting message on the path of interest rates. Those voting for higher rates focusing in part taking a tactical perspective, saying it would allow the MPC to deliver on a gradual normalisation of policy. On the other side, the majority saw that there was insufficient evidence of inflationary pressures to justify an increase. Cable has ...

Simon Smith

Sterling lower after softer CPI

Cable down around 45 pips initially after weaker than expected CPI data, which showed headline falling to 1.6%, from 1.9%. Expectation was for 1.8%. Much of the volatility seen over the past two months down to volatility in clothing and footwear prices and the timing of sales, which were seemingly earlier last year (impacting the YoY measures). The expectation did seem on the high side given this, but the skew of forecasts was to to the downside. This was probably largely factored in by the ...

Simon Smith

Eurozone grinds to a halt

After the weaker GDP data from Germany (-0.2%) and France (flat) earlier today, no surprise to see Eurozone data coming out flat. This follows on from four quarters of positive growth prior to Q2. Euro little changed as result was anticipated after earlier data.

Simon Smith

GBP weaker on Inflation Report

The initial reaction to the Bank of England Inflation Report has been for sterling to weaken, with cable moving from 1.68 to 1.6735. The headlines have shown that the Bank still expects inflation to remain below target over the forecast period and this is main reason why sterling has fallen. The Bank acknowledges that slack in the economy has been erased but is greater than previously thought owing to developments in the labour market. Market now more doubtful of 2014 rate increase, in ...

Simon Smith

Weaker earnings data push sterling lower

Sterling down around 20 pips after weaker than expected earnings data in the labour market report. Earnings wer down 0.2% on 3M YoY measure, ex-bonus measure was up 0.6% (vs. 0.7% previously). Headline impacted by bonus payment timing issues. Focus on Inflation Report in 1 hours time, given this will be first since Carney's hint in June that markets were under-estimating the risk of a rate increase this year.

Angus Campbell

BOE no change to rates

The Bank of England has kept its benchmark rate on hold at 0.5% which was as expected so the reaction from sterling has been muted.  Without any formal statement following today's meeting it no surprise that GBPUSD remains around the 1.6850 level.  For sterling it's next week's BOE Inflation Report that's going to be the major focus going forward and then on 20th August we will learn how the MPC voted today.