A cautious start to the New Year
Thursday 2 January 2020
Markets are still a little thin with Interbank desks not back in full swing until Monday but we're seeing some general USD weakness prevail as January gets underway. Reports out overnight that China has suspended cross-border listings between Shanghai and London Stock Exchanges for the time being due to differences of position over Hong Kong have helped cap some strong Pound gains. Overall though risk sentiment is generally better with Trump announcing a Phase One signing of the US-China trade deal on 15 Jan.
GBPUSD ran into some decent offers/resistance around 1.3280 to cap a strong year-end rally but the pair remains underpinned with some decent size option expiry interest today between 1.3190-00. EURGBP month-end BUBA demand is now history and we've duly seen a sharp retreat to 0.8448 (GBPEUR up to 1.1837) helped by that strong GBP rally generally before the cap. GBPJPY has rallied further to break 144.00 with also USDJPY finding dip demand below 108.50.
I stay poised to sell GBP rallies while respecting the current dip demand still and we should continue to see some good two-way business.
EURUSD remains underpinned around 1.1200 but equally struggling to break much higher. EZ PMI data out earlier was mostly better than expected but still in contraction.USDJPY has enjoyed some decent dip demand and generally better risk sentiment to rally and post 108.82 as I type. USDCHF remains on the back foot as EURUSD continues to find dip support and with EURCHF still finding a few sellers amid the general CHF demand. but with the SNB ever vigilant.
AUDUSD remains underpinned around 0.7000 but sellers at 0.7025 prevailing for the moment while USDCAD has fallen further to post 1.2969 amid the generally softer USD sentiment and firm oil price.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
Yesterday saw the Shrimpers of Southend grab a later equalizer/point and we'll continue to believe that the great escape is still on.
Happy New Year everyone and I wish you and yours all the very best for 2020. I look forward to being of on-going assistance.
Interbank rates: 08.35 GMT