ForexLive European FX news wrap: Sterling falls after wages data misses expectations

Author: Justin Low | Category: News

Forex news for the European trading session - 17 April 2018

Economic data:



  • JPY leads, NZD lags behind on the day
  • European equities mostly higher, DAX leads gains +0.84%
  • Gold down by 0.24% to $1,342.86
  • WTI up by 0.18% to $66.34
  • US 10-year yields up by 1 bps to 2.837%
  • Bitcoin up by 1.4% to $8,100

Once again, sterling steals the headlines. Following yesterday's rally higher, it rose to session highs prior to the release of the UK labour market report with cable sitting comfortably at 1.4370 levels.

But after wages growth came in below expectations, it was one-way traffic all the way down towards the 1.4300 figure level. The lows for the day stalled at 1.4306, as cable retraces some losses to go back up to 1.4321.

The other story on the day is the US dollar, as it completes a round trip from the lows back to the highs. The start of the session saw the dollar index fall to three-week lows, before posting a recovery now - sitting 0.07% higher on the day just shy of the highs.

That resulted in a bit of a see-saw move for some pairs. EUR/USD was one of them as the pair touched a high of 1.2414 on the day, but saw momentum falter after touching above 1.2400. Germany's ZEW economic sentiment data didn't help the case as well, sending EUR/USD to lows of 1.2362 on the day.

USD/JPY remains among the more quiet of the major pairs on the day, pivoting around the 107.00 figure level for the most part. Option expiry at 107.20 should help to keep the pair in check until it goes off at 1400 GMT.

Meanwhile, movement in commodity currencies were largely dictated by the move in the dollar. But the kiwi continues to struggle on the day, with AUD/NZD continuing to extend higher following a bounce at the lows near the multi-year support level.

As for the British pound, today is just the start of the real test for the currency. We still have inflation data lined up tomorrow, retail sales data on Thursday, and the Brexit bill debate by the House of Lords tomorrow as well.

It sets up for some twists and turns along the way at least. But as mentioned in my previous posts, the momentum is still with the buyers and that means we will likely see the dips bought unless something really bad happens.

And woosh, cable now up to 1.4333 on the day from the lows near 1.4300.

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