FX round-up: Sterling turns in poor performance as Trump jaws the dollar lower
By Andrew Schonberg
Date: Thursday 13 Apr 2017
(ShareCast News) - Sterling turned in a poor performance on a raft of key crosses ahead of the long Easter weekend, with US President Donald Trump earlier jawboning the US dollar down after saying he believed it was too strong.
At about 17:15 GMT, sterling was down 0.15% to $1.2521 and up 0.14% to €1.1779. The dollar-spot index fell 0.34% to $100.440.
FXTM vice president of market research Jameel Ahmad said sterling's back-away from $1.26 was as the ongoing uncertainty over Brexit's direction encouraged a negative mindset to it.
"Investors are likely to continue utilising sell-on rally opportunities in the cable, when the pair climbs near $1.25 with this being the mindset traders have exploited for months."
Earlier, Trump said in the Wall St Journal that the greenback was too strong. "That's hurting -- that will hurt ultimately," he said, also wanting US interest rates low.
His words followed Federal Reserve chair Janet Yellen having stated earlier in the week that a neutral stance on US monetary policy was appropriate.
"While it is not a surprise at all to hear the US President make downbeat comments over the Dollar, backing away from labelling China as a currency manipulator and seemingly supporting the need for lower US interest rates is a real surprise," said Ahmad.
Sterling was up on the euro, flat on the loonie and down on the aussie, kiwi, rand and yen. It remained sensitive to Brexit- and economy-linked news, in a market overall cautious amid a throng of geopolitical risks.
These risks centred on heightened tensions between the US and North Korea, as well as the US and Russia over Syria, with Brexit, France's presidential election and a crude-oil glut also factors.
Chris Saint, senior analyst at HL Currency Service, added that sterling was holding firm versus the euro, only failing to break through the €1.18 level for the first time since late-February by a fraction this morning.
Uncertainty surrounding France's election on 23 April was also a factor undermining euro strength.
"Elsewhere, the Australian dollar touched 10-week lows versus sterling yesterday but is the top-performer amongst the majors today, finding support from data showing the Australian labour market added more than three times as many jobs as expected in March."
Meanwhile, the US dollar made gains on the euro, loonie and yen, but fell on the commodity currencies of Australia, New Zealand and South Africa.
"Cable broke the 200-day moving average ($1.2555) on the upside for the first time since the Brexit referendum," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.
"UK's inflation and jobs data ... justifies the positive momentum in the pound, which has clearly been amplified by the broad-based US dollar sell-off," said Ozkardeskaya.
Special promo:
Trading the Forex Market? Visit FXmania.com to get advanced infomation about currencies and the Foreign Exchange
Market.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN