Sterling hit a 7-month high and markets move to risk-on following optimism on US-China trade deal
Cate Camerota | December 4, 2019
UK polls show the Conservative Party is holding their lead against the Labour Party, pushing sterling higher towards the 1.31 handle. News that progress is being made on the US-China deal has helped support risk-on trading. Bank of Canada will release its rate decision at 10AM EST today, the loonie has been supported heading into the decision.
December 4, 2019
EUR/USD 1.1109 GBP/USD 1.3094 USD/CAD 1.3268 AUD/USD 0.6849 USD/JPY 108.68 USD/CNH 7.0502 USD/ILS 3.4665 USD/MXN 19.4958 USD/CHF 0.9872 USD/INR 71.4610
The US dollar weakened on the data release showing that ADP employment change numbers were weaker than expected. Markets will remain focused on additional data releases this week including ISM later today and employment data later this week.GBP
The British pound broke through the 1.3013 resistance and is currently trading near the 1.31 handle. The move higher is a result of polls showing that the Tories are holding their lead over the Labour Party and as US President Trump’s visit to the UK went relatively smoothly.EUR
EUR/USD broke above the 1.1100 handle following the US data release of ADP employment change which showed an increase of 67k vs. the expectation of 135k. Traders will be focused on ISM numbers which will be released today at 10AM EST.CAD
USD/CAD is lower this morning as the markets anticipate the rate decision and Bank of Canada meeting. The rate decision will be released at 10AM EST - the market is pricing in a 7% chance of a 25bp cut today and a 22% chance of a cut in January.ASIA/PACIFIC
USD/JPY is higher for the first time in five days trading up to 108.79. The Japanese yen weakened on news that China and the US are getting closer to an agreement on the number of tariffs that will be rolled back as part of phase one of the trade agreement.
AUD/USD dropped the most in two weeks following reports that showed a miss for economic growth forecasts. The currency pair fell as much as 0.5% but has reversed these losses trading back up towards 0.6850.