Collinson FX Market Commentary - Dec 9 - Brexit first steps
by Collinson FX 9 Dec 2017 10:45 UTC
9 December 2017
Collinson FX Market Commentary - December 9 - Brexit first steps
The week closed on a positive note, with Non Farm Payrolls beating expectations, while the 'Brexit Divorce' progressed. The. EU and the U.K. agreed the first step on Brexit, clearing the way for trade negotiations to proceed, although details were withheld. This was expected, while the news from the US regarding Employment, was positive leading in to next weeks FOMC rate decision. This boosted the Dollar, with the Yen moving up to 113.50, while the EUR drifted to 1.1750.
Commodity currencies felt the wrath of the rising reserve, with the AUD testing 0.7500 on the downside, while the NZD drifted to 0.6840. The coming week will be headlined by important Central Bank interest rate decisions. The Federal Reserve will lead out with a rate rise, who along with the U.K., are ahead of the curve.
The ECB will likely leave rates unchanged, despite improving growth prospects, allowing QE to continue. Central Bank action and speculation will drive this weeks currency markets.
Collinson FX Market Commentary - December 8 - Brexit Divorce unresolved
EU GDP was steady, coming in at an annualised rate of 2.6%, supporting positive recent economic data releases. German Industrial Production contracted 1.4%, but remained positive for the year, although the EUR slipped below 1.1800. The GBP remains under pressure, heading back towards 1.3400, as 'Brexit Divorce' negotiations remain unresolved. In the US markets remain focused on tax reform, under reconciliation, while a Government shutdown threatens. Congress has been totally dysfunctional since Trump was elected, but tax reform is a huge step in the right direction, which may bode well for the Government shutdown. The Australian Dollar has been under recent pressure, with a miss on GDP not helping matters, while political chaos ensues. The AUD looks to test 0.7500, on the downside, while the NZD drifted to 0.6840. Markets await GDP numbers from Japan, while NZ manufacturing may have a small influence, locally.
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