Corporate

09 Aug 2017
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Safe havens rally as global uncertainty remains.

US Dollar

Expected Range 1.2910 to 1.2990

Only minor releases came from the US yesterday in the form of Prelim Nonfarm Productivity and Prelim Unit Labor Costs. Neither release did much to motivate markets as the USD was able to continue its gains across the board. Tensions between the US and North Korea continue to escalate with leaders of both nations continuing to talk up their military power. North Korea has now threatened to directly target US territories and as rhetoric continues to intensify we get closer to the possibility of action being taken.  The uncertainty caused here is forcing markets to take a risk off approach to investment which has seen CHF, JPY and Gold rise by almost 2.5%. The USD has maintained a strong position despite the political disputes and will likely continue to strengthen off the back of positive data. Today the focus will shift to inflation and unemployment claims. Both figures are forecast to come in with no change from previous readings as markets will then look towards tomorrows CPI releases which are forecast to show a slight increase. We will also be hearing from Fed Member Dudley today and markets will be paying close attention to the rhetoric used here for any news regarding potential rate hikes later this year.  

Sterling continued to remain under pressure following a day's trading with no data to discuss. GBP/USD fell below the 1.3 level as the Dollar continues to put pressure on the majority of currencies. Markets will finally have something to digest from the UK today with the first major release of the week. Manufacturing Production m/m is scheduled for release this morning and we are forecast to see a slight uptick from -0.2% to 0%. This will be released alongside a plethora of minor releases including Goods Trade Balance, Construction Output, Industrial Production and a NIESR GDP estimate. Positive figures here could lead to a recovery from the pound and could build momentum for the currency as we move towards the back end of the week. GBP/USD is currently trading at 1.2962.

Euro

Expected Range 1.1010 to 1.1090

A risk off approach to investment caused by global events has seen the EUR retreat slightly, most notably against the USD and CHF. We only had minor releases from the EZ yesterday, coming in the form of Italian Industrial Production m/m. This figure was forecast to show a slight dip but surprised markets by increasing to 1.1% from 0.7%. This did little to inspire movement as markets were swayed by global sentiment and a desire to invest in safe havens. Today will again show a quiet day from Europe with minor releases from France and Italy scheduled this morning. French industrial production has shown a sharp decline and this figure will do little to help a struggling EUR. With only minor releases scheduled for tomorrow from Europe it is likely that the currency could continue to struggle this week as markets continue to be motivated by a risk off approach. GBP/EUR is currently trading at 1.1059.

Australian Dollar

Expected Range 1.6410 to 1.6490

No data released from Australia yesterday as sentiment drives markets. The currency has remained relatively steady this week despite global uncertainty rising. Tonight we will hear from RBA Governor Lowe who is scheduled to testify before the House of Representatives Standing Committee on Economics. Markets have been swayed over the past few months by comments and speculation as to the central bank’s policy moving forward and we will likely see movement here. GBP/AUD is currently trading at 1.6453. 

New Zealand Dollar

Expected Range 1.7680 – 1.7900

The New Zealand Dollar retreated slightly following the RBNZ rate announcement and statement. The central bank left rates unchanged at 1.75%, stating that the next hike may not be until 2019, and downgraded inflation forecasts. Monetary policy will remain unchanged and accommodative for the time being as the RBNZ reiterate that a weaker currency is needed for consistent growth. GBP/NZD is currently trading at 1.7844.

09 Aug 2017
Share

Safe havens rally as global uncertainty remains.

US Dollar

Expected Range 1.2910 to 1.2990

Only minor releases came from the US yesterday in the form of Prelim Nonfarm Productivity and Prelim Unit Labor Costs. Neither release did much to motivate markets as the USD was able to continue its gains across the board. Tensions between the US and North Korea continue to escalate with leaders of both nations continuing to talk up their military power. North Korea has now threatened to directly target US territories and as rhetoric continues to intensify we get closer to the possibility of action being taken.  The uncertainty caused here is forcing markets to take a risk off approach to investment which has seen CHF, JPY and Gold rise by almost 2.5%. The USD has maintained a strong position despite the political disputes and will likely continue to strengthen off the back of positive data. Today the focus will shift to inflation and unemployment claims. Both figures are forecast to come in with no change from previous readings as markets will then look towards tomorrows CPI releases which are forecast to show a slight increase. We will also be hearing from Fed Member Dudley today and markets will be paying close attention to the rhetoric used here for any news regarding potential rate hikes later this year.  

Sterling continued to remain under pressure following a day's trading with no data to discuss. GBP/USD fell below the 1.3 level as the Dollar continues to put pressure on the majority of currencies. Markets will finally have something to digest from the UK today with the first major release of the week. Manufacturing Production m/m is scheduled for release this morning and we are forecast to see a slight uptick from -0.2% to 0%. This will be released alongside a plethora of minor releases including Goods Trade Balance, Construction Output, Industrial Production and a NIESR GDP estimate. Positive figures here could lead to a recovery from the pound and could build momentum for the currency as we move towards the back end of the week. GBP/USD is currently trading at 1.2962.

Euro

Expected Range 1.1010 to 1.1090

A risk off approach to investment caused by global events has seen the EUR retreat slightly, most notably against the USD and CHF. We only had minor releases from the EZ yesterday, coming in the form of Italian Industrial Production m/m. This figure was forecast to show a slight dip but surprised markets by increasing to 1.1% from 0.7%. This did little to inspire movement as markets were swayed by global sentiment and a desire to invest in safe havens. Today will again show a quiet day from Europe with minor releases from France and Italy scheduled this morning. French industrial production has shown a sharp decline and this figure will do little to help a struggling EUR. With only minor releases scheduled for tomorrow from Europe it is likely that the currency could continue to struggle this week as markets continue to be motivated by a risk off approach. GBP/EUR is currently trading at 1.1059.

Australian Dollar

Expected Range 1.6410 to 1.6490

No data released from Australia yesterday as sentiment drives markets. The currency has remained relatively steady this week despite global uncertainty rising. Tonight we will hear from RBA Governor Lowe who is scheduled to testify before the House of Representatives Standing Committee on Economics. Markets have been swayed over the past few months by comments and speculation as to the central bank’s policy moving forward and we will likely see movement here. GBP/AUD is currently trading at 1.6453. 

New Zealand Dollar

Expected Range 1.7680 – 1.7900

The New Zealand Dollar retreated slightly following the RBNZ rate announcement and statement. The central bank left rates unchanged at 1.75%, stating that the next hike may not be until 2019, and downgraded inflation forecasts. Monetary policy will remain unchanged and accommodative for the time being as the RBNZ reiterate that a weaker currency is needed for consistent growth. GBP/NZD is currently trading at 1.7844.