Sterling made further headway in early trading yesterday but failed to hold the gains as extra caution surrounded the UK currency. As comments came out from EU officials over the state of Brexit talks with a further warning that it may already be too late to reach agreement, UK PM Boris Johnson was quick to shift focus and state the UK economy would be well placed should there be no deal.
Sterling settled just below 1.3200 against the Dollar and 1.1140 against the Euro as no direct benefit came from the positive news around the Moderna vaccine report.
Media reports also indicated that UK Chief Negotiator Frost had commented that a trade deal could be reached early next week, although there were still important caveats and reservations over the quality of any deal.
The New York Empire manufacturing index lowered to 6.3 for November from 10.5 previously and below consensus forecasts of 13.0. There was also a significant slow in new orders growth while unfilled orders remained in contraction territory.
There was a slightly faster rate of employment growth with a solid increase in prices for the month. Companies were slightly more optimistic over the longer-term outlook. The latest retail sales data is due on Tuesday.
Reports warning that the German economy could stagnate or even contract during the fourth quarter as the newly implemented restrictions in the services sector continues to undermine activity. Overall risk appetite strengthened during the European session following another bout of optimism over coronavirus developments with Moderna announcing encouraging trial data, the second company to do so.
Equity markets made fresh gains, amid a broadly resilient Dollar against European currencies. The Euro however, was also hampered by the inability of EU envoys to reach unanimity on the recovery fund, dampening hopes for a strong 2021 recovery.
As of writing, the Euro currently trades just over the 1.1850 against its US counterpart.
Data to watch
14:30 - USD - Core Retail Sales
14:30 - USD - Retail Sales
15:00 - GBP - BOE Gov Bailey Speaks
19:00 - USD - Fed Chair Powell Speaks
Posted in Daily Market News on Nov 17 2020