Sterling slips against euro after European Central Bank tapering signal

Adjust Comment Print

The dollar weakened more broadly after US data showed a rise in jobless claims and a decrease in producer prices.

Asian markets were mixed.

The news gave the euro a further boost and pushed the single currency to a three year high against the dollar - up 0.8% to $1.2127. Hong Kong's Hang Seng surged 0.9 percent to 31,412.54 and the Shanghai Composite index added 0.1 percent to 3,428.94.

Wall Street's three major stock indexes hit record highs with earnings for S&P 500 companies expected to have increased by 11.8 percent in the recently-ended quarter, according to Thomson Reuters I/B/E/S. Futures tracking the Dow, S&P and Nasdaq 100 are all now in positive territory, but only marginally.

COMMODITIES: Oil prices corrected lower today, with WTI and Brent crude declining by 0.5% and 0.3% respectively, erasing the hefty gains they posted yesterday.

Expansive monetary policy by central banks in major economies is also credited for the recent bouoyance in share prices that has sent major indexes to new highs.

USA gold futures for February delivery settled up $3.20, or 0.2 percent, at $1,322.50 per ounce. However, there is growing speculation that the bank could raise rates, if it decides to terminate its massive stimulus program (QE) in September. The meeting minutes signaled the tightening of monetary policy in the eurozone could begin sometime early in the year.

AUD/USD is supported around 0.7832 levels and now trading at 0.7889 levels. Meanwhile, dollar/loonie was up almost 0.2%, with the loonie's softness likely owed to the pullback in oil prices.

The minutes showed a "very positive" growth outlook from the ECB's top economists, with a "prolonged period" of above-potential growth expected. Both releases are due at 1330 GMT.

DailyFX US AM Digest US Dollar at Three Year Low versus the Euro
Sterling slips against euro after European Central Bank tapering signal

"It may be a bit premature to jump on the inflation bandwagon".

December exports grew an annual 10.9%, beating forecasts but down from a robust 12.3% gain in November.

The euro's rise weighed on the dollar index, which measures the greenback against six rival currencies.

We maintain our call that the European Central Bank will likely end QE before year-end, possibly as early as September, and proceed with a first depo rate increase by 20bp in Q4.·. Imports grew at the even-slower pace of 4.5%.

Marks & Spencer PLC (MKS.LN) (MKS.LN) sank 7% after the British retailer and supermarket chain said like-for-like food sales declined (http://www.marketwatch.com/story/marks-spencer-food-sales-fall-at-christmas-2018-01-11) in the 13 weeks to Christmas.

Boston Fed President Eric Rosengren - a non-voting FOMC member in 2018 - will be giving a speech on the United States economic outlook at 2115 GMT.

EURUSD has finally broken above significant resistance around 1.2100 and is now trading at a three-year high. The Tenkan- and Kijun-sen lines are positively aligned, pointing to bullish short-term momentum.

The report triggered a sell-off in US Treasuries and the greenback. Support is at 1.1960 and 1.1910. The area around the 76.4% Fibonacci retracement of the September 8 to December 12 downleg at 1,328.65 could act as resistance to price advancing.

In commodities, oil prices rose for a sixth day after Russia's oil minister said global crude supplies were "not balanced yet", alleviating market concerns about a wind-down of the OPEC-led deal to reduce production.

Juniper Networks, Inc. (JNPR) vs. Cisco Systems, Inc. (CSCO)
Mariner Wealth Advisors Ltd Limited Liability Company reported 0.1% of its portfolio in Cisco Systems, Inc. (NASDAQ: CSCO ). Mitchell Mcleod Pugh Williams Inc holds 0.93% of its portfolio in Cisco Systems, Inc. (NASDAQ: CSCO ) for 46,806 shares.


Comments