Pound Climbs Amid Risk Appetite
February 15 2018 - 1:38AM
RTTF2
The pound advanced against its key counterparts in early
European deals on Thursday amid risk appetite, as European shares
rose following firm cues from Asia and Wall Street, as investors
shrugged off signs of inflation pickup in the U.S. and the
possibility of an interest rate increase at next month's Fed policy
meeting.
The German DAX was up over 1 percent, France's CAC 40 index was
rallying 1.7 percent on the back of upbeat earnings reports and the
U.K.'s FTSE 100 was moving up 0.6 percent.
Investors focus on key economic data, including reports on
producer prices, industrial production and homebuilder confidence
for more direction.
Oil held firm after data showed a less-than-expected rise in
U.S. crude inventories and Saudi Energy Minister Khalid al-Falih
affirmed willingness to withhold production throughout 2018.
In brief remarks during a ceremonial swearing-in, new Fed
Chairman Jerome Powell said the Federal Reserve will seek to
normalize its policies in a way that will extend the recovery and
bolster its goals of achieving stable inflation and maximum
employment.
He also said that the Fed will keep an eye on financial-system
risks following the recent wild swings in financial markets.
The currency traded mixed in the Asian session. While it fell
against the yen and the franc, it held steady against the euro.
Against the greenback, it advanced.
Extending early rally, the pound firmed to a 10-day high of
1.4077 against the greenback. The pound is seen finding resistance
around the 1.43 level.
The pound recovered to 149.95 against the Japanese yen, from a
low of 148.94 hit 9:30 pm ET. If the pound extends rise, 153.00 is
seen as its next resistance level.
Data from the Ministry of Economy, Trade and Industry showed
that Japan's industrial production grew more than initially
estimated in December.
Industrial production advanced a seasonally adjusted 2.9 percent
month-over-month in December, faster than the 2.7 percent rise
reported earlier.
Having fallen to 1.2967 against the franc at 2:30 am ET, the
pound spiked up to a 6-day high of 1.3036. The next possible
resistance for the pound is seen around the 1.32 area.
The pound advanced to a 2-day high of 0.8869 versus the euro,
from a low of 0.8902 seen at 2:30 am ET. On the upside, 0.87 is
likely seen as the next resistance for the pound.
Data from Eurostat showed that the euro area trade surplus
increased in December from the previous month on higher
exports.
The trade surplus rose to a seasonally adjusted EUR 23.8 billion
in December from EUR 22 billion in the previous month. The expected
level was EUR 22.3 billion.
Looking ahead, U.S. PPI and industrial production for January,
NAHB housing market for February, weekly jobless claims for the
week ended February 10 and New York Fed's empire manufacturing
survey for February as well as Canada existing home sales for
January are set for release in the New York session.
At 1:30 pm ET, the Bank of Canada Deputy Governor Lawrence
Schembri speaks at the Manitoba Association for Business Economics
in Winnipeg.
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