GBP/USD. December 17, 2019 – Sterling continues to keep downside
The British currency continues to decline on Tuesday, reaching a support level of 1.3200. Earlier, after the victory of the conservatives in the parliamentary elections in the UK, the sterling managed to update the maximum of May 2018 at the mark 1.35, but quickly lost all positions.
Pressure on the British currency is exerted by weak macroeconomic data. In particular, yesterday's data on business activity showed the sharpest decline since July 2016. The Purchasing Managers Index (PMI) fell from the November level of 49.3 to 48.5 points in December, which became a minimum of 41 months. The service sector PMI in December fell from 49.3 to 49 points, having reached its lowest level in nine months. UK manufacturing PMI fell from 48.9 to 47.4 points, which also became the lowest indicator in four months.
Today you should pay attention to the release of data on the British labor market and the speech of the Bank of England head Mark Carney. The weakness of statistical reports may push the regulator to soften monetary policy, that will put further pressure on the sterling.
---------- Post added 12-18-2019 at 02:54 PM ---------- Previous post was 12-17-2019 at 03:10 PM ----------
EUR/USD. December 18, 2019 – Euro shows weakness
Today the euro keeps showing decrease paired with the dollar, having reached the mark 1.1125. The currency is under pressure of investors' concerns about the situation with Brexit. Earlier British Prime Minister Boris Johnson said, that he intended to introduce the law about country's obligation to leave the European Union in 2020 without the possibility of extending the transition period. This fact again cast doubt on the likelihood of leaving the EU with a deal.
Along with it the US dollar is supported by optimism around trade negotiations between the US and China and by strong macroeconomic data from the United States. Industrial production in November increased by 1.1% against forecasts of an increase of 0.8% and after a decline of 0.9% a month earlier. The number of building permits in November also exceeded forecasts.
Today you should pay attention to Ifo business optimism index for December and Eurozone inflation data for November.
---------- Post added 12-19-2019 at 02:38 PM ---------- Previous post was 12-18-2019 at 02:54 PM ----------
Brent/USD. December 19, 2019 – Oil stabilized above $66 after data from the US Department of Energy
Oil continues to hold in the area of local highs above the level of $66 per barrel. Brent was supported by yesterday's report from the US Department of Energy. The statistics reflected a decrease in oil reserves by 1 million barrels, while similar data from API a day earlier showed an increase in stocks by 5 million barrels.
The appetite for risky assets remains moderate, as no news has been received from the front of the trade war last days. So, during the day we expect calm trading in the area above $62 per barrel.
---------- Post added 12-20-2019 at 02:33 PM ---------- Previous post was 12-19-2019 at 02:38 PM ----------
GBP/USD. December 20, 2019 – Sterling plummeted to 1.3000
The sterling continues to decline, reaching the level of 1.3000 on Friday. The pound became the main outsider of the week, collapsing from the level of 1.35. The driver of the fall became the statements by British Prime Minister Boris Johnson, revived fears of a tough and disorganized Brexit.
Additional pressure on the pound was provided by weak data on retail sales in the UK, which showed an unexpected decline in November at the fastest pace for the year (-0.6%). On an annualized basis, retail sales growth slowed to the level of April 2018 (1%).
As a result of weak data reflecting the detrimental influence of Brexit on the British economy, the Bank of England left rates unchanged at 0.75%. Moreover, market participants expect the regulator to begin a cycle of easing monetary policy at the beginning of next year.