Newsletter – 25th January 2018

Morning Bulletin


  • There were some substantial moves in FX markets yesterday, with Sterling once again one of the main beneficiaries, whilst the US Dollar slumped even further.
  • The Pound gained +0.66% on the Euro, closing the day around a fresh 7-week high of 1.1458.
  • Even more impressive the Pound rallied as high as 1.4241 against the US Dollar, before closing the day just shy of 1.4200, up some +1.40% on the day.
  • The Pound’s performance was underpinned by some solid UK data releases in the morning:
    • Average Earnings Index 3m/y 2.5% as expected
    • Unemployment Rate 4.3% as expected
  • Speaking yesterday US Commerce Secretary Ross said there was a good chance that the renegotiation of NAFTA would be successful.
  • Speaking yesterday, in a clear message to President Trump, German Chancellor Angela Merkel argued that protectionism was not the answer to the world’s problems. She also said that Europe wants to have a good relationship with the UK in the future, but there could be no compromise on the EU’s core principles.
  • Other Data of note:
    • US Flash Manufacturing PMI 55.5 (55.2 Exp)
    • US Flash Services PMI 53.3 (54.5 Exp)
    • US Existing Home Sales 5.57M (5.72M)

  • The Kiwi Dollar has been hammered overnight following much weaker than expected Inflation data, with a CPI print of0.1% in the final quarter of 2017. That was down on an expected 0.4% rise.
  • GBP/NZD rallied from 1.9150 to 1.9400 in the immediate aftermath, whilst similarly EUR/NZD rallied from 1.6700 to 1.6900.
  • The US Dollar remained weak overnight following comments from US Treasury Secretary Steven Mnuchin who said a weaker Dollar could be good for Trade and the US economy.
  • German Gfk Consumer Climate 11.0 (10.8 Exp)
  • Spanish Unemployment Rate 16.6% (16.1% Exp)
  • All eyes will be on the ECB this afternoon, and whilst rates will almost certainly be held at 0.00% it is the accompanying statement and press conference that will be scrutinised.
  • The other data of note this afternoon will be Canadian Retail Sales and US Unemployment Claims, both due at 1.30pm.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1497 +0.18
GBP/USD 1.4262 +0.19
EUR/USD 1.2401 -0.04
AUD/USD 0.8072 +0.14


Time (GMT) Region Data Release Forecast Previous
09.00 EUR German IFO Business Climate 117.1 117.2
11.00 GBP CBI Realized Sales 11 20
12.45 EUR ECB Minimum Bid Rate 0.00% 0.00%
13.30 EUR ECB Press Conference
13.30 CAD Core Retail Sales m/m 0.9% 0.8%
13.30 USD Unemployment Claims 236K 220K
13.30 USD Goods Trade Balance -68.6Bn -70.0Bn
14.00 EUR Belgian NBB Business Climate 0.4 0.1
15.00 USD New Home Sales 676K 733K