FOREX: GBP Weakness Extends, USD Index Steady Ahead of NFP
Jan-09 17:07
- The focus for G10 currency markets on Thursday has been the weaker GBP, with early moves prompting GBPUSD to print the lowest level since November 2023 at 1.2239. Despite moves stabilising, Cable remains weaker on the session, consolidating around the 2024 lows at 1.2300 as we approach the APAC crossover. The likes of GBPJPY (-0.75%) and EURGBP (+0.35%) are adjusting in tandem, highlighting the renewed Uk fiscal worries continue to permeate financial markets.
- EURGBP extended its recovery, printing a two-month high above 0.8400. Recall on Wednesday, we had a firm break above 50-day EMA resistance, which intersected at 0.8311. Today’s continued strength undermines the recent bearish theme and suggests scope for a stronger short-term recovery, targeting 0.8448, the Oct 31 high and reversal trigger.
- The USD index has remained steady, and will likely have been impacted by lower volumes due to the US Federal holiday and the close proximity to the US non-farm payrolls report tomorrow.
- As such, EURUSD (-0.17%) has spent the session oscillating around 1.0300, while AUDUSD (-0.32%) price action has remained contained below the 0.6200 mark. The pair did print a fresh cycle low of 0.6172, after we had retail sales slightly below expectations. Market pricing for an RBA cut at the Feb meeting is just over 70%, supported after yesterday's slower core CPI print and retail sales figures today.
- All focus on tomorrow’s US employment data, while Canadian jobs figures will also cross.
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