Today’s Briefing

Today’s Rates

GBP>EUR – 1.1229

GBP>USD – 1.2705

EUR>USD – 1.1314

GBP>CAD – 1.6848

GBP>AUD – 1.8269

GBP>SEK – 11.986

GBP>AED – 4.6658

GBP>ZAR – 18.740


Today’s Calendar

·         GBP Average Earnings Excluding Bonus (3Mo/Yr) (Apr)

·         GBP ILO Unemployment Rate (3M) (Apr)



Today’s Highlights

  • GBP Sellars maintain hold amid political uncertainty
  • GBP All eyes on UK Job data
  • UK wages rise (YoY, Apr) by 3.4%, beats estimates
  • Italy Deputy PM rules out budget adjustment



Sterling took a wallop yesterday following the big miss in April GDP and production data out of the UK. Cable printed a low at 1.2653, which is the lowest level seen since last Tuesday. The Pound also printed a fresh five-month low against the Euro in what is now the sixth consecutive week the UK currency has breached its prior-week low versus the common currency. April GDP contracted 0.4% m/m, the biggest monthly decline since March 2016, while April manufacturing fell by a 3.9% m/m rate — the biggest contraction since June 2002. The data build an increasing sense of gloom about an economy being afflicted by prolonged political and associated Brexit uncertainty, coupled with a slowing economy in continental Europe. The Pound looks like it will remain firmly on the out-of-favour list of overlay and reserve managers, especially with arch Brexiteer Boris Johnson favourite to become the new prime minister. “BoJo” is running his campaign on a hard, no-deal-if-necessary Brexit, which would see the UK adopt less favourable WTO trading terms after exiting the EU. Cable has resistance at 1.2691-93, and support at 1.2637-40


The Dollar has settled to a consolidation of the gains seen yesterday against most other currencies, which were seen as the 10-year Treasury yield rose over 6 bp following the deal on immigration struck between the U.S. and Mexico. EUR-USD has been maintaining a narrow range in the lower 1.1300s after rotating lower from Friday’s 12-week high at 1.1347. Cable has settled near the 1.2680 marks, down from the three-week high seen on Friday at 1.2763. USD-JPY lifted by over 30 pips in the hours after the Tokyo fixing today. EUR-JPY and other yen cross saw a similar price action as the Japanese currency lost ground as the relief rally on easing trade tensions in equity markets continued. USD-JPY printed an intraday high at 108.64 but has so far remained shy of yesterday’s 11-day peak at 108.71. Despite President Trump threatening to hit China with fresh tariffs should he fail to make progress with President XI at the G20 later in the month, Chinese markets led gains across Asian equity bourses, with the CSI 300 index showing a 2.4% gain as of the late PM session. Helping underpin were remarks from Beijing that local governments would be able to tap funds raised from special bonds to use in major investment projects. Elsewhere, AUD-USD dipped to an eight-day low at 0.6947. USD-CAD has consolidated in the mid-1.3200s, above the 11-week low yesterday at 1.3243. Focus today will fall on the release of U.S. PPI data, ahead of CPI figures tomorrow. We are expecting benign data, with the headline PPI figure seen slowing to 1.9% y/y from 2.2%. Anything softer than markets expect could further encourage Fed easing expectations.

XE Market Analysis: Europe – Jun 11, 2019

This document has been prepared solely for information and is not intended as an Inducement with respect to the purchase or sale of any financial instrument. By its nature market analysis represents the personal view of the author and no warranty can be, or is, offered as to the accuracy of any such analysis, or that predictions provided in any such analysis will prove to be correct. Should you rely on any analysis, information or report provided as part of the Service it does so entirely at its own risk, and Frank eXchange Limited/Manor House Foreign eXchange Limited accepts no responsibility or liability for any loss or damage you may suffer as a result.  Information and opinions have been obtained from sources believed to be reliable, but no representation is made as to their accuracy. No copy of this document can be taken without prior written permission.