background image

NY Open: Brexit breakthrough upstages US inflation

Forex 4 minutes to read

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.
CPI
Source: US Board of Labor Statistics
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.
EURUSD
EURUSD (source: Saxo Bank)

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.