Daily FX Wrap: UK polls remain a key focus for FX markets while a substantial ADP beat helped USD
GBP was a key focus once again for markets as further UK election polls continued to show a narrowing in the Conservative’s lead heading into the finale next week. That said, the currency was granted some reprieve today after yesterday’s YouGov-inspired sell-off with GBP/USD finding demand in the mid 1.2800’s and EUR/GBP retreating back to circa 0.8700. GBP traders also digested the latest UK manufacturing PMI which modestly exceeded expectations (56.7 vs. Exp. 56.4) but the figure was not enough to divert trader’s attention away from the UK political scene.
Elsewhere, EUR ran out of steam against the greenback with some suggesting that the pair has risen too far, too fast and half-an-eye on next week’s ECB meeting which will carry risks of potential taper-talk in what was otherwise a relatively range-bound session for FX markets. USD/JPY was dealt a helping hand despite firm domestic Japanese data during Asia-Pac trade with this afternoon’s blockbuster ADP release the main guiding force ahead of tomorrow’s US Nonfarm payrolls. However, gains were trimmed heading into the close of European hours as US yields saw a modest pullback.
From an antipodean perspective, AUD/USD underperformed and broke below the 0.7400 handle despite initial support from better-than-expected Retail Sales and higher Capex estimates through to 2018, as this was overshadowed by disappointing Chinese PMI data. Elsewhere, CAD was initially granted some modest reprieve following the healthy draw-down in crude reported in the APIs last night ahead of the DoE equivalent which failed to provide too much traction in the market after posting a large drawdown and uptick in crude output.
Add a Comment