Pound soars to 15-month high

USD

The greenback was weaker across as the board (with the exception of the yen) as bears took over on weaker economic data. Against the yen however, the US Dollar was at a eight week high this morning supported by a rise in US Treasury yields.

On Friday, the core retail sales posted a small increase of 0.2% against the predicted 0.5% while the headline figure dropped 0.2% instead of a predicted 0.1% increase. Capacity utilisation, industrial production and UoM sentiment index also let down the US Dollar with the latter dropping to 95.3. No major reports are due today, with traders thereby keeping their eyes on updates on tax reform and the situation in North Korea.

GBP

The British Pound got another boost on Friday, carrying on with its post Bank of England rally, hitting a 15 month high against the US Dollar this morning, soaring past $1.36. BoE policymaker Gertjan Vlieghe echoed the central bank’s message of the previous day that it could raise rates in “coming months.” Governor’s Carney speech later today will be watched for any further insights.

EUR

The common currency had a bit of mixed run as it reacted to the markets. The Eurozone’s trade surplus printed a lower than expected result at EUR 18.6 billion against an expected EUR 20.1 billion. The Italian trade balance and the final CPI are due today.

CHF

The Swiss franc also had a bit of a mixed run as it reacted to its contemporaries. No reports were out for the Swiss economy at the end of last week and none is on the tap today, consequently leading to a slow start for the lower-yielding currency.

JPY

The Japanese currency was on the back foot against most of its peers on the back of the after-effects of a North Korean missile strike. Traders also decided not to go long ahead of the Bank of Japan statement later in the week. With Japan closed for a bank holiday, no major movements are expected for the currency.

Gold

Gold slipped to its lowest level in over two weeks on Monday as the dollar and equities rallied, while prospects of monetary policy tightening in the United States ahead of a Federal Reserve meeting also weighed on the metal. Spot gold was down 0.3 percent at $1,315.36 an ounce by 0658 GMT. Earlier in the session, gold hit $1314.36, its lowest since Aug 31.

Oil

U.S. crude oil prices rose above $50 per barrel on Monday and were near last week’s multi-month highs as the number of U.S. rigs drilling for new production fell and refineries continued to restart after getting knocked out by Hurricane Harvey. U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading up 10 cents, or 0.2 percent, at $49.99 by 0653 GMT, after earlier nudging above the $50 per barrel mark towards the more than three-month high of $50.50 reached last Thursday.

The most important economic events:

GBP BOE Governor Carney Speech (15:00)

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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