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08 Feb 2017
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Parliament approve Brexit Bill.  

United States Dollar:

Yesterday saw a quiet day, in terms of data, for the USD. Only minor releases were seen, with Crude oil inventories ticking up from 6.5M to 13.8M. There has been little media attention on Donald Trump over the past 24 hours, which in current times seems like an age. Legal battles continue over his proposed immigration ban, which is likely to be overturned. Today’s focus will turn to Unemployment claims which are due to rise from 246K to 249K. Following last week’s payroll figures investors will be keeping a keen eye on this release. The expectations of a rate hike in the short term are slowly wavering as markets begin to price in a more cautious approach from the Fed.

 

After a three-day debate, Prime Minister May gained the approval of the Brexit bill, from the lower house of parliament. The voting caused little controversy with the bill being passed by a large majority (494 against 122) with no amendments. This vote was seen as one of the final steps that May needed to take to trigger article 50. She will still need to have the approval of the House of Lords, who will vote on March 7th, but this is being priced in as a formality. We have seen very little, in terms of data, from the UK this week and this continues today. Attention will focus on this evening''s Bank of England Inclusion Reception. BOE Governor, Mark Carney, is due to speak at this event and if recent appearances from Carney are anything to go by we will likely see volatility. This speech follows comments from the hawkish MPC member, Kristen Forbes, who stated that she supported a rate hike in the medium term. Carney will likely defend his stance that the MPC are in no position to raise interest rates at this moment. Carney is due to speak at 6:30 GMT. GBP/USD is currently sitting at 1.2524.

We expect a range today in the GBP/USD1.2490 to 1.2560

Euro:

There was no data of note from the Eurozone yesterday. The only minor release from today has seen German trade Balance fall from 21.8B to 18.4B this morning, however, this drop was not enough to motivate market movement. As we move closer to the French election political uncertainty continues to add risk to the EUR. Marine Le Pens’ National Front party continues to gain momentum which will likely add uncertainty and lead to increased volatility as the future of France’s membership in the EU will fall into question. GBP/EUR is currently sitting at 1.1726.

We expect a range today in the GBP/EUR rate of 1.1680 to 1.1760

Aussie and Kiwi Dollars:

The RBNZ decided to maintain rates at 1.75% at their first review of 2017. NZD contracted of the back of this release, however, the fall in price was likely due to the RBNZ statement released in conjunction which stated they may maintain rates at this record low figure for up to 3 years. This comes with a warning that borrowing rates will continue to rise, which will likely cause worries for home buyers. Little data of note from the Aussie Dollar yesterday will see attention turn to RBA Governor Lowe, who will be speaking within the hour at the Australian Economic Forum Dinner in Sydney. GBP/AUD is currently at 1.6438 with GBP/NZD at 1.7399.

We expect a range today in the GBP/AUD rate of 1.6400 to 1.6475

We expect a range today in the GBP/NZD rate of 1.7360 to 1.7440

Data Releases

AUD: RBNZ Gov Wheeler Speaks

EUR: No data

GBP: BOE Gov Carney Speaks

NZD: No data

USD: Unemployment Claims

 

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