background image background image background image

NY Open: Carney 'The Cable Guy'

Forex 4 minutes to read
MO
Michael O’Neill

FX Trader, Loonieviews.net

Summary:  It's been another rock-and-roll day for sterling on the Brexit roller-coaster. And with talks taking place here there and everywhere, it's a safe bet there'll be more days like this.


Bank of England governor Mark Carney put Cable through its paces today. GBPUSD opened at 1.2900 and sank to 1.2856 before reversing course and soaring to 1.2990. Carney had a lot to do with both moves. He left interest rates unchanged, surprising no one. The statement was somewhat dovish saying UK growth slowed, inflation has dropped back close to the 2% target and warning that future rate increases would be gradual and limited, and GBPUSD tanked.

The fall was brief. 

The governor tempered the dovish bias by reminding markets that “fundamentals of the UK economy are sound. The financial sector is resilient. corporate balance sheets are strong, and the labour market is tight.” Sterling soared, and it got an added boost from Brexit headlines. Prime Minister Theresa May met European Commission President Jean-Claude Juncker. EU officials have been nearly unanimous with their comments that the original May/EU Brexit agreement could not be renegotiated, yet there's a lot of talk going on. In addition to Juncker, May is talking to European Parliament President Antonio Tajani and with European Council President Donald Tusk. Furthermore, May and Juncker plan to meet for more discussions.

The US dollar opened in New York with small gains against everything except the Japanese yen. USDCHF and AUDUSD were unchanged. Those gains have been pared as of 14:00 GMT. USDCAD extended its overnight gains this morning on the back of bullish technicals and lower WTI oil prices. The overnight break above 1.3220 targets a retest of the 2019 peak of 1.3365, although resistance at 1.3290 and 1.3320 could be tough.

Wall Street is in the red. Growth downgrades in Europe and the UK and a comment by Dallas Fed President saying that the US was not an island encouraged sellers. Twitter (TWTR: Nasdaq) is getting spanked (down 10.13% as of 14:00 GMT) as traders believe a slightly downgraded outlook and the decision to scrap the monthly user metric trumps better than expected quarterly earnings.
GBPUSD , five minute. Source: Saxo Bank
Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.