Forex

USD And GBP Drift Amid Growing Concerns On China-US Trade Deal And Brexit While AUD Jumps On Job Report

On Thursday the USD slid following an uninspiring US retail data and growing concerns regarding the US-China trade deal. The GBP, on the other hand, continued to show volatility and was on the edge as the EU and Britain grapple to broker a Brexit deal. As most major currencies drifted the largest gainer was the AUD.

Source: XE.Com

AUD gains as GBP banks on the success of Brexit

The AUD gained 0.4% from the lows in the previous session following data indicating light hiring minimizing the possibility of monetary easing in the coming month. The GBP moved a higher to around $1.2828 after oscillating around its new five-month high in the previous session. The sterling benefitted from a series of positive headlines on the possibility of Britain reaching a Brexit deal ahead of the EU leaders summit scheduled later on Thursday in Brussels. The pound has jumped 5% since last week following the resumption of Brexit negotiations.

According to Nick Twidale the Director of Xchainge the progress, if the negotiations are a sign that we are nearing some sort of deal for Brexit, Twidale is optimistic that the parties will reach an orderly deal. He asserts that it will be positive news for GBP if the Brexit is not hard adding that a deal or a near deal could see the sterling push to $1.3500 or more.

However, Richard Grace an analyst at Australia’s Commonwealth Bank feel that if there is no deal the sterling could slump to even below $1.2200.

USD drifts on bleak retail sales

Meanwhile, the USD drifted on Wednesday after data indicated that there was a drop in retail sales for the first time in almost seven months. This paints a bleak picture of the US economy. The USD lost 0.1% versus the euro to $1.1083 but maintained its position versus the yen at 108.76. Despite hitting a new month low against a basket of currencies to 97.898 the USD was still at that level on Thursday morning.

In Australia, unemployment is contracting which resulted in the AUD jumping $0.6786. This was good news for the central bank because it took off some pressure regarding more interest cuts next month.

Craig James the Chief Economist of CBA indicated that the Reserve Bank does not have any reason now to reduce rates next month. This will provide the Reserve Bank additional time to review the effectiveness of the previous interest cuts.

Merry Markets is the home of free financial news and analysis on Forex, Stocks and cryptocurrencies. Check out our latest trading guides on best bitcoin trading brokers, Top FX Trading Brokers, and Indices Trading. Follow our reviews on Easy Markets Website, Etoro Website and City Index Forex Trading broker.

Ruchi Gupta

Ruchi Gupta covers various beats from finance to technology and from lifestyle to hobbies. She has an MBA in Finance. Ruchi enjoys writing on celebrities and political news. She likes traveling and exploring places.

Related Articles

Back to top button