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NY Open: Brexit breakthrough upstages US inflation
Michael O’Neill
FX Trader, Loonieviews.net
Summary: News of a Brexit deal but no indications of Westminster getting behind it saw GBPUSD trade in an extremely choppy fashion Wednesday.
The news of the deal and today’s UK Cabinet meeting to discuss the proposal distracted traders from today’s US inflation report. October CPI rose 0.3% month-on-month, as expected and higher than the 0.1% seen in September. Core CPI rose 0.2%. (forecast 0.2 m/m, September 0.1% m/m). Hurricanes may have slightly skewed the results. Fears of forecasting beating results proved unfounded, and the US dollar has drifted lower on the news.
EURUSD popped, dropped, and then climbed after Wall Street opened, leaving the single currency with a 0.53% gain (as of 13:45 GMT) since New York opened. AUDUSD and NZDUSD traded in a similar fashion versus the euro. USDCAD and USDJPY are unchanged since the open. FX traders may bide their time until Federal Reserve chair Powell’s speech at the end of the day. It is followed by a Q&A session, suggesting that Asia markets could be choppy if he deviates from his “gradual hikes” mantra.
As has been the norm of late, GBPUSD has been wildly choppy, trading in a 1.2885-1.3002 range since the New York open. Traders are reacting to every Brexit headline.
Wall Street was relieved when the inflation report didn’t present any upside surprises. The Nasdaq is 0.72% higher as of 1400 GMT followed by the S&P 500 which is up 0.71% and a 0.55% gain in the DJIA.
Oil prices movements make GBPUSD price action look boring. WTI oil rallied from $55.58 to $57.31, fulling reversing its overnight losses, in part due to this morning’s US dollar losses.
As has been the norm of late, GBPUSD has been wildly choppy, trading in a 1.2885-1.3002 range since the New York open. Traders are reacting to every Brexit headline.
Wall Street was relieved when the inflation report didn’t present any upside surprises. The Nasdaq is 0.72% higher as of 1400 GMT followed by the S&P 500 which is up 0.71% and a 0.55% gain in the DJIA.
Oil prices movements make GBPUSD price action look boring. WTI oil rallied from $55.58 to $57.31, fulling reversing its overnight losses, in part due to this morning’s US dollar losses.