FXEMPIRE
All

As Risk Appetite Returns, Economic Data and Brexit Put the EUR and GBP in Focus

Risk appetite returns, with focus shifting to economic data out of the Eurozone and Brexit later in the day.
Bob Mason
Smart city and global network concept. IoT(Internet of Things). ICT(Information Communication Technology).

Earlier in the Day:

It was a relatively busy day on the Asian economic calendar in the earlier hours of this morning.

Key stats included November trade data out of Australia and December inflation figures out of China.

From the UK, December’s BRC Retail Sales Monitor was also in focus in the early part of the day.

Outside of the stats, geopolitics remained in focus. The Asian markets responded to Trump’s speech late in the day that eased concerns of further action against Iran.

For Aussie Dollar

Australia’s trade surplus widened from a revised A$4.075bn to A$5.800bn in November. Economists had forecast a trade surplus of A$4.150bn.

According to the ABS,

  • Goods and services credits rose by A$706m (2%) to A$40,893m.
    • Non-rural goods rose A$718m (3%) and rural goods by A$9m.
    • Non-monetary gold fell by A$120m (6%).
    • The net exports of goods under merchanting held steady at A$5m, while services credits rose by A$99m (1%).
  • Goods and services imports fell A$1,020m (3%) to A$35,093m.
    • Imports of consumption goods fell A$610m (7%).
    • Capital goods imports fell A$259m (4%), with intermediate and other merchandise goods imports falling A$102m (1%).
    • Non-monetary gold imports fell A$11m (2%), with services debits down A$58m (1%).

The Aussie Dollar moved from $0.68728 to $0.68733 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.19% to $0.6873.

Out of China

The annual rate of inflation held steady at 4.5% in December. Economists had forecast an annual rate of inflation of 4.7%.

Month-on-month, consumer prices stalled in December, following a 0.4% rise in November. Economists had forecasted a 0.3% rise.

Wholesale inflation also disappointed, with the Producer Price Index falling by 0.5% in December. In November, the Producer Price Index had fallen by 1.4%. Economists had forecasted a 0.4% decline.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.10% to ¥109.23 against the greenback. The Kiwi Dollar was up by 0.01% to $0.6648.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Key stats include November industrial production and trade data out of Germany in the early part of the day.

Later in the European session, the Eurozone’s November unemployment rate will also be in focus.

While we would expect the stats out of Germany to have a material influence, any downside will likely be limited.

Renewed optimism ahead of next week’s phase 1 trade agreement signing between the U.S and China will likely offset any negative numbers.

On the geopolitical front, Iran and Brexit will remain in focus. From the UK Parliament, it’s the 3rd day of debate over Johnson’s Withdrawal Bill. A parliamentary vote is expected late in the day, which will ensure that Britain’ transition period ends on 31st December, with no extension to the transition period permissible…

At the time of writing, the EUR was up by 0.07% to $1.1113.

For the Pound

It’s a quiet day ahead on the economic calendar. There are no material stats due out following this morning’s BRC Retail Sales Monitor numbers for December.

We expect focus through the European session to be on the UK Parliamentary debate on Boris Johnson’s Withdrawal Bill.

Expect the Pound to respond to the outcome. On Wednesday, the European Commission President had met with the British PM and once again voiced concerns over the timeline to wrap up a trade agreement…

Earlier in the day, the BRC Retail Sales Monitor rose by 1.7% in December (year-on-year), partially reversing a 4.9% slide in November.

At the time of writing, the Pound was up by 0.08% to $1.3107.

Across the Pond

It’s also a relatively quiet day on the data front. Key stats are limited to the weekly jobless claims figures.

Barring particularly dire numbers, we expect the numbers to have a muted impact on the U.S Dollar.

The focus on the day will remain on Washington and the Middle East. Both the Greenback and the global financial markets are yet to be fully free of the threat of more from Iran…

For now, however, it’s risk-on, which is Dollar negative.

The Dollar Spot Index was down by 0.02% to 97.280 at the time of writing.

For the Loonie

It’s a relatively quiet day on the economic calendar, with December housing starts and November building permits due out.

We would expect the numbers to have a muted impact on the Loonie, barring particularly dire numbers.

With tensions in the Middle East abating, for now, focus returned to the phase 1 trade agreement that provided support to crude oil prices early in the day.

Oil prices had been under the hammer on Wednesday as tensions eased, with WTI sliding by 5.74%. At the time of writing, WTI was up by 1.02%.

The Loonie was up by 0.05% to C$1.3033 against the U.S Dollar, at the time of writing.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US