GDP Crushed By Data Miss

USD Riding High

The US dollar is ending the week on a much better note than it started. Stronger than expected data yesterday (retail sales & Philly Fed both better beat) has helped lift the dollar into the end of the week. USD index trades 97.13 last.

Euro Lower on USD Rally

EURUSD has been lower over the final European morning on the week, weighed on by the recovery in USD.  Yesterday, the release of the ECB December minutes showed a more optimistic tone. Policymakers were far less divided than in recent meetings and sounded more optimistic over the outlook for the Eurozone economy. Despite the better tone, EURUSD trades 1.1189 last.

GBP Down on Data Miss

GBPUSD has been sharply lower today as retail sales for December were bitterly disappointing at -0.6% vs an expected 0.5% reading. This is the latest in a string of weak data points for the UK with GDP and inflation all missing this week also. The market is now increasing its expectations of a forthcoming BOE rate cut, weighing on GBP. GBPUSD trades 1.3060 last.

SPX500 Hits New Highs

Risk assets have been well supported across the week and are ending higher on Friday with the SPX500 trading into new highs at 3325.78 last. The signing of the US/China trade deal has been a big boost for risk appetite over the week with the market now hopeful that talks can progress quickly onto a phase two deal. Another week passing without any further US/Iran tension has also been welcomed by traders.

JPY & Gold Lower

Safe havens have been weaker so far today with both JPY and gold lower against USD. The rally in equities along with the recovery in USD late in the week has put pressure on both. XAUUSD trades 1554.37 last, just below the 1554.69 level. USDJPY trades 110.17 last, having broken out above recent highs.

Crude Rallies On Inventories Draw

Oil prices have been higher on Friday, taking crude back up to even on the week, as of writing. The EIA this week reported an unexpected 2.5 million barrel drawdown which helped lift prices. The signing of the US/China trade deal has also offered support and is expected to provide a buffer in the near term despite the large bearish weekly candle posted last week.

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