As the dollar manages to pick up some ground from its abysmal performance yesterday, all eyes are on the US today with the ADP Employment report being released in the afternoon, followed by several Fed speeches. Although the report in itself will not be market-moving, the data is usually is a leading indicator as to what figure Non-Farm Payrolls will print on Friday.
EURUSD took advantage of the greenback’s weakness, keeping well supported throughout the day and even briefly going beyond 1.20. The pair opened the session trading at 1.1969, before closing yesterday off just below at 1.1948.
In spite of EURUSD run of form, it was not all good news for the euro yesterday. Firstly, Eurozone Markit Manufacturing PMI came out as forecasted at 51.7, which on the surface is ok, but when one looks deeper into the report it is clear sentiment is mixed and not a positive as the headline figure suggests. An hour later, we then had Eurozone Core Inflation Rate. With recording a previous of 1.2%, and forecasting 0.8%, when the headline figure of -0.2% was released markets were taken back and this did prompt a short in the EUR.
Just before the Eurozone Inflation number was released, GBPEUR was hovering around the 1.1190 – 1.12 mark; however, when the data was released, the pair soared, and has even managed to sustain its gains. The pair opened the day yesterday trading at 1.1196, and after finding support above 1.12, managed to close the session at 1.1227.
This comes at a time when Brexit negotiations really seem to be taking a turn for the worse. It was released yesterday that Downing Street have said it will be “very difficult” to finalize a free trade agreement with the EU before the No-Deal deadline at the end of this year. Thus, it would seem at present Britain is heading for a No-Deal. A spokesman for Boris said while “an agreement is still possible and this is still our goal, but it is clear it will not be easy to achieve.”
Unphased by the Brexit news, cable showed some resilience yesterday, maintaining itself above the 1.34 handle. The pair opened the session at 1.3401, before ending the day only slightly above at 1.3413.
