Quiet Trading Ahead of Festivities

Raphael Sonabend, FX Analyst

With Christmas only two days away, today will be our last day of the week with releases out from all countries and as such our last morning report of the year as well. The US existing home sales figures, which were released yesterday afternoon, saw the dollar weaken across the majors as the data fell below forecasts by over 0.25 million. Today’s trading will focus on the UK current account at 09:30, the Canadian and US GDP releases at 13:30 and the US new home sales data at 15:00. A busy day should allow for market excitement before Christmas is upon us. Tomorrow’s highlight will be US unemployment, forecast to worsen from 289K to 291K, it is unlikely for traders to react too quickly to this release.
As this is our last report of the year we want to wish Merry Christmas and a Happy New Year to all our readers!



GBP/EUR: Currently trading at 1.2739
Today will be the busiest day for the UK for the rest of 2014 and as such trading will focus on these releases. This morning will bring the most recent UK current account figures, forecast to improve from -23.1B to -21.1B, it would not come as a big surprise if the deficit narrowed more than expected after net borrowing was below forecasts last week. Following this, BBA mortgage approvals and Final GDP will be released. Final GDP is likely to remain stable at 0.7% as has been the trend recently and BBA mortgage approvals has been predicted to improve from 37.1K to 37.3K.
Whilst Sterling has the potential to improve against the Euro on the back of this data, level trading that has been seen previously is likely to continue.


GBP/USD: Currently trading at 1.5586
Yesterday witnessed the dollar weaken against the pound as existing home sales figures fell from 5.25M to 4.93M, below the forecast level of 5.21M. Whilst this was the lowest annual pace since May, it remained up 2.1% compared to last November for the second consecutive month.
This morning’s UK releases, forecast to improve, could see Cable push up in the morning. These potential gains would be unlikely to last long as US core durable goods orders and final GDP releases are both forecast to increase. Whilst no one trend has been seen in this pairing, we anticipate that range-bound trading will be seen as 2014 draws to a close.


EUR/USD: Currently trading at 1.2234
This pair saw a half-cent rise in favour of the Euro yesterday morning before correcting back to around 1.2225. Poor US existing home sales saw little reaction in this pairing and in fact the dollar gained on the Euro soon after its release.
With today’s focus on US data, the dollar has the potential to push up against the Euro once again. Strong data forecast to be released in the early afternoon should be reinforced by new home sales, which is predicted to improve by 3K and would therefore consolidate potential dollar gains. Given limited reaction to yesterday’s data, it is probable that the markets will once again fail to react and this pair is likely to continue trading in a tight range.


GBP/AUD: Currently trading at 1.9183
Level trading was seen throughout yesterday’s session as no data was released to influence this pairing.
Today’s trading will focus on UK data, which is due to be released in the morning. As this data is forecast to improve, we could see a final pre-Christmas push by the pound against the Aussie. Whilst the Australian dollar is unlikely to be affected by US data, it is important to note that Japan does not have bank holidays this week and as the Bank of Japan’s Governor Kuroda is due to speak on Thursday morning, the Aussie could react to his words accordingly.


GBP/NZD: Currently trading at 2.0133
Old trends prevailed as volatility was seen in this pairing before closing the day at 2.0168 (opened at 2.0167). This volatile trading helped the pound post gains against the Kiwi however these were recaptured as Kiwi trade balance data rose to -213M from -911M. This was led by a fall in exports of 9.5% as dairy exports were down 27% and represented the lowest deficit in New Zealand since 2010.
The Kiwi’s gains extended into this morning’s session but are likely to be halted by UK data later. We expect that level trading will continue and the volatility in this trading will subdue as traders relax over Christmas however keen analysts will still follow the Japanese governor’s speech, which has the potential to affect the Kiwi.


GBP/CAD: Currently trading at 1.8107
Yesterday saw another day of range-bound trading in this pair as neither currency reacted to poor US data.
Today will bring UK data in the morning followed by the Canadian GDP this afternoon. With UK data forecast to improve and Canadian figures predicted to drop off, we could see a final pre-Christmas Sterling rally against the Loonie.







This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

Christmas Shopping Leads to Sterling Strength

Morning Report 22.12.2014

Raphael Sonabend, FX Analyst

Level trading and record high sales data suggests that with Christmas fast approaching, traders have stepped away from their computers and flocked to the streets for last minute shopping. UK CBI realised sales data saw the strongest growth in 26 years after prices were slashed around the UK in Black Friday deals. Sales data overshadowed poor Public Sector Net Borrowing, which released a result £7B above the previous. Today’s trading is unlikely to provide much market excitement as the main focus will lie on New Zealand’s trade balance figures at 21:45. As the New Year approaches, assuming that no unexpected data is released, stable trading looks set to continue. 

GBP/EUR: Currently trading at 1.2736

Public sector net borrowing failed to see Sterling strength as it registered at 13.4B, which was below the forecast 14.8B; traders focused on the rise from 6.4B. Soon after, CBI realised sales data was released and this allowed the pound to gain against the Euro. Registering at 61, this was the strongest growth since 1988. This significant growth was driven by the increased sales over Black Friday and other pre-Christmas shopping.

Today should not bring any surprises with no data of influence due to be released. Currently trading with relative stability, this level trading is likely to continue throughout the week.

GBP/USD: Currently trading at 1.5628

No US data out on Friday proved beneficial for the dollar as markets focused on an increase in UK borrowing. Cable saw a fall of almost a cent until this pair finally met with resistance at the 1.56 level and began a correction in favour of the pound.

This correction continued through the weekend and into this morning’s session. Today’s trading will focus on US existing home sales data, which is forecast to fall from 5.26M to 5.21M. If these sales figures are in line with predictions then Sterling’s strength is likely to continue.

EUR/USD: Currently trading at 1.2263

The dollar gained on the Euro throughout Friday’s session as Eurozone data unexpectedly stole the proverbial spotlight. The Eurozone’s current account registered a narrowing of the surplus, falling from 32.0B to 20.5B, and the Euro fell against most of its counterparts.

US existing home sales data will be today’s highlight and this will therefore provide the Euro the opportunity to gain on the greenback if home sales fall as predicted.

GBP/AUD: Currently trading at 1.9199

This pair rose a cent after strong UK CBI realised sales figures were released. Meeting resistance at the 1.922 mark, this pair continued to trade within a tight range around the 1.918 level.

Level trading is likely to continue through today’s session with the only data-of-note being US home sales data this afternoon. Whilst this is forecast to decrease, it is unlikely to affect the Aussie too much in either direction.

GBP/NZD: Currently trading at 2.0168

Sterling has been gaining on the Kiwi since early Friday morning after poor NZ data was released. Poor ANZ business confidence data on Friday, coupled with strong UK CBI realised sales, saw the pound gain a cent on the Kiwi.

Today’s trading will be in anticipation of New Zealand’s trade balance figures, which will be released at 21:45 tonight. Forecast to increase from -908M to -550M, the Kiwi should be able to resist the pound’s recent strength and begin to post gains of its own.

GBP/CAD: Currently trading at 1.8120

After ten days of Sterling gains, the Loonie has been able to resist the pound and maintain a stable trading position for the past four days. Canadian data on Friday saw core CPI falling from 0.3% to -0.2% and Core retail sales rising to the forecast level of 0.2%. This data continued the previous trend of level trading and the Loonie failed to post its own gains against the pound.

Stability can be expected to extend into today’s session as no data is due out of either country. CAD traders may turn to US existing home sales data this afternoon however this is unlikely to provide the Loonie with any strength.

This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

Volatility Retreats as Christmas Approaches

Morning Report 19.12.2014

Raphael Sonabend, FX Analyst

Yesterday saw a quiet day across the board with the main highlights being the UK’s retail sales data in the morning and the US unemployment claims figures in the afternoon. With Christmas fast approaching it came as no surprise that retail sales rose to 1.6% from 1.0%, despite the forecast fall to 0.3%. US unemployment claims followed this trend and improved when the predictions foresaw a worse result. The final data-of-influence in the day was the Philly Fed manufacturing index, which saw a significant fall from 40.8 to 24.5. At 09:30 this morning, the Public Sector Net Borrowing figures out of the UK are due to be released. These will be shortly followed by further UK data in the form of CBI realised sales. With both sets of data forecast to improve, the pound could continue to strengthen against most counterparts. This afternoon’s focus will turn to Canadian data. At 13:30 CPI and retail sales figures are both forecast to fall compared to the previous month and we therefore anticipate the Loonie’s recent gains will be lost and the Canadian dollar could weaken further.



GBP/EUR: Currently trading at 1.2758
On the back of strong UK retail sales figures, the pound gained on the Euro throughout yesterday’s session. Climbing from 1.2622 to 1.2760, this pair began to level off in the evening and traded around the 1.275 mark. This morning saw the GfK German consumer climate data beating forecasts and hitting 9.0, lending the Euro some strength to resist the pound’s gains. After months of pessimism regarding the German economy, this downward trend has reached an end after consistently strong reports have been released recently. As confidence is being restored in the German economic climate, these rays of optimism are likely to emanate into the Eurozone and the Euro could be looking at a much-needed rally at some point in the early New Year.
A relatively light calendar today will focus on the public sector net borrowing figures and CBI realised sales from the UK. Both sets of data are forecast to improve and we may therefore see further strengthening in the pound against the Euro.


GBP/USD: Currently trading at 1.5675
Cable witnessed slight volatility as strong UK and US data competed for the upper hand, UK data came out on top as the Philly Fed manufacturing index registered a pronounced fall. Yesterday morning saw the pound climb a cent on the dollar after retail sales saw a strong increase from 1.0% to 1.6%. The dollar quickly displayed its own might as US unemployment claims registered a result of 289K. As the Philly Fed manufacturing index saw a fall from 40.8 to 24.5, the pound recovered all previously lost ground and Cable is now trading around 1.5665.
No data out of the US today will leave this pairing dependent on UK releases. As UK data is predicted to improve, the pound could see another day of gains against the dollar.


EUR/USD: Currently trading at 1.2283
Yesterday afternoon saw the first hiatus in this pairing’s volatility as the Euro resisted the dollar’s gains that were made on the back of strong unemployment claims data. Confidence in the German economy clearly provided strength in the Euro throughout the day as the dollar’s hike was halted.
With no data out of either country today, level trading is likely to continue throughout, with the possibility of the Euro posting gains of its own.


GBP/AUD: Currently trading at 1.9222
The RBA bulletin, which was released early yesterday morning, failed to impress the markets and the then prevailing trends continued. Despite the US seeing strong unemployment claims figures, this pair rose from 1.9045 to 1.9222 before correcting back in the Aussie’s favour. This morning has seen Sterling once again resisting the currently weak Aussie and this pair has breached the 1.92 mark.
A quiet day today could allow the pound to continue its gains as UK data is predicted to improve. If the figures out of the UK exceed expectations, we could be looking at another attempt at the 1.93 mark.


GBP/NZD: Currently trading at 2.0163
As has been the trend over the past few weeks, this pairing saw heavy volatility throughout yesterday’s session. Reacting strongly to UK retail sales figures, this pair rose a cent throughout the day before beginning a fall in the evening in the Kiwi’s favour. Despite poor NZ data early this morning – the ANZ business confidence survey fell from 31.5 to 30.4 and annual credit card spending fell from 6.8% to 5.2% – the Kiwi continued its gains against Sterling. However these gains failed to continue and either as a delayed reaction to poor NZ figures or because of a natural correction, the pound resisted and began its own advances.
With UK releases today predicted to be strong, the pound could continue to gain throughout the day and possibly reach the 2.025 level that was seen yesterday.


GBP/CAD: Currently trading at 1.8180
Stable trading was seen throughout yesterday’s session with some brief excitement as the pound attempted to break the deadlock and made a dash for the 1.82 mark, breaching it momentarily before the Loonie dragged Sterling back to the 1.813 level.
Today should bring slightly more activity as Canadian CPI and retail sales figures are due to be released this afternoon. With both sets of data forecast to fall and UK figures forecast to increase, we could see the pound end the GBP/CAD standoff and rise up against the Loonie.






This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

CPI figures leave dollar in a weak state

www.caxtonfx.com Morning Report 18.12.2014

Myles Baxter, FX Analyst Mixed data from the US left it as the ultimate winner in yesterday’s trading session. Poor US CPI and Core CPI figures left the dollar in a weaker state in the afternoon however its global peers failed to capitalise ahead of the Fed Statement and Press Conference that loomed in the evening. The Statement and Economic Projections by and large confirmed recent information and led the market to viewing it with a dovish tint. It was the press conference in the evening that really kicked things off! Yellen’s conference was full of economic optimism and progression towards the 2% inflation target was bolstered. The key phrase used was “normalisation is unlikely to come during the next couple of meetings”, fuelling speculation that an interest rate hike may fall in mid-2015. This morning’s encouraging UK Retail Sales may help the pound resist the dollar but with unemployment claims and the Philly Fed Manufacturing Index due this afternoon, this could be a big ask. To discuss your currency requirements call us on 0845 658 2223 or visit www.caxtonfx.com GBP/EUR: Currently trading at 1.2691 A stellar Sterling performance was seen yesterday after strong UK data emerged in the form of average earnings index and claimant count change. The pound gained against the Euro throughout the day on the back of these sturdy figures. The German Ifo business climate survey, which was released this morning saw the pound continue to gain on the Euro, despite a promising result of 105.5.  After a busy couple of days, today will see relative quiet from both countries with the main focus being the UK retail sales data out this morning. UK retail sales showed an impressive figure of 1.6% far higher than the predicted 0.8%. This will undoubtedly help the pound in its current campaign to win back the upper echelons of the 1.20 region and we expect advances towards 1.2750 shortly. GBP/USD: Currently trading at 1.5622 The dollar slowly climbed against the pound throughout yesterday’s session before jumping a cent after the FOMC economic projections were released. Strong figures across the board as all projections saw a revised increase. Their released graphs suggest that the majority of Fed members deem a rate rise in 2015 to be the most appropriate time for the first hike with only two members proposing otherwise.  The dollar’s gains met resistance at the 1.5535 mark only an hour after the Fed projections were released and has since been losing ground against the pound. With decent UK data and US data forecast to decline, the pound could continue to regain its losses made against the greenback yesterday. EUR/USD: Currently trading at 1.2305 Volatility was witnessed after the Fed statement was released yesterday evening. Initially, the dollar weakened against the Euro and fell half a cent, before the release of the press conference which allowed a reversal and the dollar recovered significantly. The greenback continued to gain in this morning’s session, jumping half a cent before meeting opposition at the first resistance level and starting a correction in the Euro’s favour. The euro kept this momentum flowing as the German Ifo business climate survey resulted in 105.5, above the previous result of 104.7. The US Philly Fed manufacturing index survey this afternoon is forecast to drop off from 40.8 to 26.3. After a poor flash manufacturing PMI figure was seen on Tuesday, this fall would not come as a surprise and in fact is unlikely to affect the dollar significantly as the results have likely already been priced in. GBP/AUD: Currently trading at 1.9105 The Aussie breached the 1.93 mark yesterday hitting five-year lows against the pound. The pound was unable to sustain this level against the Aussie and this pair has since been trading in favour of the Australian dollar. The Fed conference saw a spike in this pair but failed to influence the rate in the long-run. Today will see no data out of Australia and therefore the focus will be on the UK and US. With solid UK retail sales, another challenge at 1.92 may be on the cards in the next week or so. GBP/NZD: Currently trading at 2.0202 Volatile trading was seen throughout yesterday’s session as the Kiwi fell two cents against the pound in the early hours before recovering over the course of the day and eventually closing at the same level as opening. A strong GDP figure out of New Zealand saw the quarterly growth increasing by 1.0%, above the forecast 0.7%. This positive figure allowed the Kiwi’s gains to extend into this morning’s session. NZ data is relatively light today with the only expected release to be visitor arrivals at 21:45 however we anticipate that this data will not be received with much market excitement. This lack of data from New Zealand could support the pound when coupled with this morning’s UK retail sales. GBP/CAD: Currently trading at 1.8141 After nine days of desperately trying to resist the pound’s gains, the Loonie finally blocked Sterling’s lunges and riposted with thrusts of its own until breaking the deadlock and gaining almost three cent. US crude oil inventories data yesterday showed a decline in barrels (however not as much as forecast), which led to oil prices rising slightly. The Canadian economy, which relies heavily on oil, reacted to this refreshing spike in oil prices and the Loonie gained accordingly.  Whilst the Loonie has finally started to resist sterling’s gains, with oil prices at record lows it is unlikely that this pairing will see a true reversal soon.  This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.