IFX Market Report
Wednesday 10th January 2018

Market Report

Sterling’s 3-day rising streak halted yesterday and it weakened against a basket of currencies as investors cashed in on profits, although expectations that Brexit talks will have a positive outcome continued to provide some support to the British currency.

Markets were still anxious after PM Theresa May’s attempt to reshape her cabinet, even though all major players remained unscathed despite political pressure to relocate or sack members following political scandals. The pound weakened as investors fear this demonstration of the PM’s unsettled position could make it harder for Britain to negotiate a stronger trade deal with the EU

GBPEUR opened at 1.1337 and closed on the same undulating through trading ranges of 1.1320 and 1.1350 throughout the session

GBPUSD opened at the day’s high of 1.3539 and continued the overnight trading pattern to fall from the open. The pair settled midday to trade through narrow margins hitting lows of 1.3510 and closing at 1.3518

Worldwide News

In Europe, there were no major economic data releases today though the Euro-zone November unemployment level fell again to 8.7% from 8.8%, the lowest since early 2009. The region’s jobless rate has steadily fallen since peaking in the aftermath of the sovereign debt crisis at 12% in 2013 – Despite that, wage growth has fallen behind inflation suggesting that some slack remains in the labour market.

Germany continued release positive survey figures; German industrial production for November (YoY) grew above expectations reporting growth of 5.6% against 2.8% previously indicated. The German trade balance also report a climb to 23.7bn versus expectations of 21.3bn in October.

In the US, job openings fell in November 2017 to 5.88m below survey forecasts of 6.04, and down from 5.93m. The lowest levels since May, as vacancies decreased in transportation, warehousing and other services

EURUSD opened at 1.1943 and lost overnight gains to the session’s low of 1.1918 against a broadly weakened dollar. Limited factors helped to sway the pair either way and ended up closing just above the low at 1.1919