Sterling favoured amid quiet markets - In.....>

FOREX: Sterling favoured amid quiet markets

- In the first full session since the holidays, markets favoured sterling in

thin conditions, with some citing an interview with EU's Von Der Leyen, who

suggested a mid-2020 reflection on a transition period extension as part of the

Brexit process could be a sensible option as the UK departs. As a result,

GBP/USD chewed through $1.3050 resistance to hit new post-election highs above

the $1.31 handle. The furtive GBP strength triggered a minor downtick in the USD

index, which helped flatter AUD, NZD and CAD. The rally in AUD saw the pair hit

the highest since late July.

-All-in-all, most moves took place amid thin volumes and light liquidity,

raising the risk of a reversal when trading fully resumes in the new year. The

JPY fell as US equity futures opened at and maintained all time highs,

pressuring havens to the bottom of the G10 pile Friday.

-Data and risk events were few and far between, keeping focus on the few

releases due ahead of New Year's Eve. The highlight will likely be the MNI

Chicago PMI on Monday, which is expected to improve to 48.0 from 46.3.