Pound suffers on Brexit stalemate

 

Pound pressured at start of the week

Weekend news that the latest Brexit negotiations had hit yet another stalemate pressured the pound at this week’s open. UK’s Financial Times reported that PM May is said to call the current draft Brexit deal a “non-starter” and as a result EU leaders may cancel plans for a special summit in November due to the lack of progress in negotiations. EU leaders are supposed to convene for a Brexit summit this Wednesday, and hopes were that a deal could be announced.

GBP/USD hit its lowest level in six days and tested the 100-day moving average support at 1.3099 again. The FX pair had climbed to a three-week high of 1.3259 on Friday on deal hopes, but closed lower on the day. Should the 100-day moving average support be breached convincingly, then the 55-day average at 1.2990 would come in to focus.

 

GBP/USD Daily Chart

Source” Oanda fxTrade

 

Asia Market Update: Echoes of October past

RBA’s Harper reiterates current stance

RBA board member Ian Harper has reiterated the RBA view that interest rates are more likely to rise than fall, however added that a near-term rate increase would “spook” consumers. He commented that a cloud remains over the consumer outlook though some stimulus is coming from a lower Australian dollar, which is helping to support confidence.

Monthly retail sales growth has been either zero or positive over the past eight months, though not setting the economy alight, with a maximum reading of +0.6% in February and the August reading at +0.3%. Meanwhile, Westpac’s consumer confidence index rose above zero for the first time in three months this month.

Aussie has been on the defensive versus the US dollar this morning, looking set to post a decline for the second straight day. AUD/USD is currently at 0.7107 with this month’s previous lows above the 0.7040 level acting as support.

 

AUD/USD Daily Chart

Source: Oanda fxTrade

 

US retail sales expected to show a rebound in September

The Asian data calendar is not yet complete, with Japan’s industrial production and capacity utilization data still pending. The European calendar is barren of tier-1 data, and the highlight of the North American calendar will be US retail sales for September. Sales are expected to rise 0.5% m/m, more than the 0.1% posted for August, and would be back at the June/July levels. The Empire State manufacturing index and business inventories are also due. The Bank of Canada’s business outlook survey is the only release from north of the border.

You can view the full MarketPulse data calendar at https://www.marketpulse.com/economic-events/

 

Market Podcast October 15

Source: MarketPulse – Market Podcast October 15

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
Andrew Robinson

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