Currency markets saw a mixed session yesterday, one which was characterised by a general lack of any trend continuation as well as many pairs being confined to small trading ranges. Putting things in perspective, the pound traded in a 0.75 cent range against the greenback while the EURUSD pair was contained within a 0.80 cent daily range. Markets appear to still be finding their feet as we get further into the fresh year, it looks like they might, slowly but surely, be finding the correct levels given the amount of event risk associated with each currency.
Speaking of event risk, Thursday will see the beginning of another debate in Parliament over PM May’s withdrawal agreement deal. The one she intended to enhance but returns to Parliament barely touched since her request to postpone last December’s ‘meaningful vote’. It appears May was only delaying the inevitable; it’s actually possible she’s ensured her deal has less support than previously, with a significant part of the Conservative Party now more inclined to leave the European Union without a deal. Either way, debate will begin this week with a vote almost certain to take place on either the 15th/16th January.
Today’s trading session is light on the economic data front. Markets will most likely be focusing on key macro themes such as Brexit, the US government shutdown (now running into its 18th day with almost 35% of the government affected. Interestingly, the longest shutdown ever came under the Clinton administration and lasted for 21 days. It’s almost certain this will exceed that – nice work, Donald!) and US/China trade talks.
Written by Viv Savani. 8:32am, January 8th 2019
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