Consolidation Across Currencies, Sterling Still in Focus
We saw a few interesting moves across the currencies yesterday as the fall out from the US tax reform plan over the weekend hit the market, however we saw a mixed reaction across the stock indices with some strong results during the European session being tempered later on in the US day. Currencies initially reacted positively with the dollar and risk currencies gaining before dropping back off later in the day.
Sterling was once again under the microscope as we had tier 1 fundamental data being released and further developments in Brexit with PM May meeting the EU’s Juncker over lunch. This resulted in a bit of see-saw action as the stronger than expected Construction PMI took sterling 60 pips higher before more uncertainty over the Irish border with regard to the Brexit deal led to it retracing that move.
Looking ahead to today and the dominant themes remain the same with the US Tax plan developments and Brexit still very much to the fore, however we also have a significant amount of tier 1 economic data being released. First up in Asia, we have the Current Account and Retail Sales numbers being released in Australia before we have the RBA’s Cash Rate announcement later in the day – so could be a busy one for Aussie traders. Later, in the London session we have the Services PMI data out of the UK before we move to New York and the Canadian Trade Balance numbers followed last in the session by the US ISM Non-Manufacturing PMI numbers.
So, a big day ahead in potential market moving events with a few of the majors sitting close to decent technical levels as well.
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