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Time for BoE to take charge of GBP

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USD

The greenback gained more traction over its recent rally, finishing the day in the green.

PPI readings came in a little lower that anticipated at a 0.2% increase for the headline figure and a 0.1% increase for the core figure. This however has still kept traders optimistic towards an buoyant CPI result later in the week. Other than this, the absence of North Korean provocations and a continued emphasis on tax reforms have allowed the US dollar to edge higher. On the data front, the headline CPI may show a 0.3% increase while the core reading may print a 0.2% gain today.

EUR

The common currency was able to hold on its advances owing to positive data from the Eurozone. German final CPI remained unaltered at 0.1% but the WPI came out higher at 0.3% against a predicted 0.1% increase and an earlier 0.1% fall. The Eurozone quarterly unemployment also printed a 0.4% gain against an anticipated 0.3% uptick. In addition, Eurozone industrial production also increased by 0.1% as predicted. As for today, only the French final CPI reading is due.

GBP

The British pound was unable to establish a clear direction as it was tied down by slips in the UK jobs report. Although the claimant count fell by 2.8k instead of rising by 0.8K, the figure was anticipated to drop by 2.9k. In addition, the average earnings did not move to the anticipated 2.3% but remained at 2.1%. On a positive note though, the unemployment figure improved to 4.3% from 4.4%. On the economic data front, we have the BOE decision due today. A hawkish tilt is anticipated after following the positive CPI figures previously this week.

CHF

The Swiss currency continued to slide against its contemporaries as risk appetite improved. On the data front, Swiss PPI printed better than expected results at 0.3% against an anticipated 0.2% gain. However, traders continue to be wary of the SNB at their upcoming monetary policy announcement.

JPY

The Japanese yen continued to lose ground on the back of dollar strength and positive market sentiment. Data from the country came out better than anticipated with the BSI manufacturing index leaping to +9.4 from -2.9, surpassing the expected the expected 4.8 figure. The revised industrial reports is due from Japan today with no changes from the -0.8% figure expected.

Gold

Spot gold dropped on Thurdsay to its lowest level in nearly a fortnight on a steading greenback and declining risk aversion.  A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies. Spot gold was down 0.1 percent at $1,321.24 an ounce, after earlier dropping to its lowest since Sept. 1 at $1,318.75.

Oil

Oil prices stabilised on Thursday, holding on to most of its recent gains after predictions for stronger oil demand by the International Energy Agency (IEA).

Benchmark Brent crude was down 10 cents at $55.06 a barrel by 0730 GMT, after rising 89 cents or 1.6 percent on Wednesday. U.S. light crude was unchanged at $49.30 after gaining 2.2 percent in the previous session.

Wednesday’s gains followed an IEA report which raised its estimate of 2017 world oil demand growth to 1.6 million barrels per day (bpd) from 1.5 million bpd.

The most important economic events:

  • GBP Interest Rate Decision (GMT 11:00)
  • USD Jobless Claims (GMT 12:30)

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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