IFX Market Report
Friday 29th September 2017

Market Report

GBP trading yesterday was a clear game of two halves, in the morning as Bank of England Mark Carney spoke the pound fell, especially against the euro. But later on, as Brexit secretary David Davis released a statement the pound strengthened most notably against the US dollar.

Mark Carney’s speech at a conference in London spoke about the positives and financial stability since the central bank gained independence in the 1990’s. However, regarding the future of the UK economy he warned the BoE will do everything in their power but he does not believe it can fully protect the UK from Brexit fallout.

David Davis said the 4th round of negotiations between UK and EU had gone well and they had made ‘decisive steps forward’ and ‘considerable progress’.

GBPEUR started the day around 1.14 and fell half a cent to low of 1.1353, by close of play the pound had managed to get to a high of 1.1408.

Before Carney’s speech GBPUSD was at 1.3397 but fell to a low of 1.3350, before rising a cent in the afternoon hitting a high of 1.3443 as markets in Europe closed.

Worldwide News

German inflation came in as expected at 1.8%, but the GfK reading of Consumer Confidence Survey dropped unexpectedly to 10.8 from 10.9, and more significant is that markets were expecting a rise on last month’s figure.

The US Advance Goods Trade Balance came in better than expected at -$62.9bn vs -$65.1bn and a slight improvement on July’s -$63.9bn.

US GDP figures showed an improvement moving up 3.1% on an annualised basis from 3.0% last time. Personal Consumption figures and Expenditures figure both came in on estimate at 1.0% and 0.9% respectively.

Despite the positive data and having had 3 days of making gains against a basket of currencies, marking its strongest performance in 9 months, the US dollar lost ground on Thursday as investors adjusted their positions and looked at taking profit ahead of the end of the 3rd quarter.

Despite this, it’s still trading around 1% higher than at the start of the week and is on track for its best week in 2017.

EURUSD rose from an early morning low 1.1723 to rise to high of 1.1798 before closing the day at 1.1777.

The Canadian dollar made headway against the US dollar, as USDCAD touched a 4-week low helped mainly by steady oil prices of 1.2420.