Market Info

GBP continues to gain but markets cautious ahead of FOMC Minutes

11/10/2017 | OzForex

United States Dollar:

GBP/USD strengthened to an interbank high of 1.3220, through yesterday trading, following strong UK Manufacturing and an increase in estimated UK GDP. Annualised Manufacturing production grew to 2.8% vs 1.9% expected while the monthly numbers posted 0.1% higher than predictions at 0.4%. The was mainly attributed to growth in output of Metal and Metal Products. Around the same time news of a widening in UK Trade deficit was largely overlooked, however, the figures are further evidence that the decline in sterling’s value over the past year is doing little to boost the UK’s overall trade position. Immediately following the releases, cable traded to touch a mid-market high of 1.32 but went further still following an increase in the National Institute of Economic and Social Research''s UK GDP estimates, for the past quarter. If they are correct, UK economic growth touched 0.4%, 0.1% higher than between April and June 2017. While increased growth is positive news for sterling, especially given the current conditions facing the UK economy, many economists still see UK activity slowing when compared to other major economies, such as the US and Europe.

Looking ahead to today, markets will likely be cautious ahead of US FOMC Minutes, due this evening. Going from FED member speeches since the meeting, the minutes will likely focus on Inflation as the major topic of discussion.

We expect a range today in the GBP/USD1.3075 and 1.33

Euro:

GBP/EUR added over three-quarters of a cent following the improved Manufacturing and UK GDP estimates, as mentioned above, but has lost much of these gains as market expectations for a tapering in the ECB’s Quantitative Easing platform escalate overnight and this early trading this morning.

EUR/USD broke back through the 1.18 level and reached an interbank peak of 1.1843 overnight following reports that the ECB is expected to signal a reduction in its bond-buying program later this month. A string of positive macroeconomic data sets has renewed optimism in the wider EU economic recovery and driven the Euro higher.

We expect a range today in the GBP/EUR rate of 1.1075 and 1.1225

Aussie and Kiwi Dollars:

The Australian Dollar inched higher through overnight traded against the Greenback and retracted some ground against Sterling following a strong Consumer Sentiment report from Westpac. Combined with the positive NAB Business Confidence survey, released earlier this week, the report indicated that Australian business conditions have climbed above its long-term average in September and reversed last month’s losses.

Soft macroeconomic data and ongoing political uncertainty saw the NZD test support levels and forced the currency lower against key crosses. GBP/NZD continued to trade higher as the lack of NZ news combined with positive UK numbers saw the pair hit a mid-market high of 1.8693 Attentions now turn to the Federal Reserve’s FOMC meeting minutes for wider direction.

We expect a range today in the GBP/AUD rate of 1.6850 to 1.7025

We expect a range today in the GBP/NZD rate of 1.8560 to 1.8750

Data Releases

AUD: No Data

EUR: No Data

GBP: No Data

NZD: No Data

USD: FOMC Minutes

 

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