IronFX Daily Commentary by Charalambos Pissouros | 07/10/2016
October 7, 2016 8:45 am
Bottom falls out of GBP as Asian markets open • GBP collapsed (biggest crash since Brexit), but quickly recovered most losses. • A news story about French Pres. Hollande demanding “tough Brexit negotiations”, may have been the initial trigger. • Very thin liquidity conditions (China closed) likely amplified the plunge. • Once the move began, computerized trading algorithms may have added momentum to it. • Sentiment towards GBP remains very negative, amid renewed “hard Brexit” worries.
Will the US employment data add fuel to the USD rally? • NFP for Sept. is exp. 175k, unempl. rate unchanged and avg. hourly earnings to accelerate. • Overall, this looks like a solid report that could add further fuel to the recent USD rally. • But risks for USD may be asymmetrical (disappointment likely to generate bigger negative market reaction than the positive reaction in case of the solid report).
As for the rest of today’s events: • UK: Industrial production for Aug. is exp. to rise at the same pace as prev. We see some upside risks to the forecast. Although a positive surprise could support GBP a bit, we remain bearish on sterling overall. • Canada: Unemployment rate for Sep. is exp. unchanged. This could support CAD.
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Bottom falls out of GBP as Asian markets open
• GBP collapsed (biggest crash since Brexit), but quickly recovered most losses.
• A news story about French Pres. Hollande demanding “tough Brexit negotiations”, may have been the initial trigger.
• Very thin liquidity conditions (China closed) likely amplified the plunge.
• Once the move began, computerized trading algorithms may have added momentum to it.
• Sentiment towards GBP remains very negative, amid renewed “hard Brexit” worries.
Will the US employment data add fuel to the USD rally?
• NFP for Sept. is exp. 175k, unempl. rate unchanged and avg. hourly earnings to accelerate.
• Overall, this looks like a solid report that could add further fuel to the recent USD rally.
• But risks for USD may be asymmetrical (disappointment likely to generate bigger negative market reaction than the positive reaction in case of the solid report).
As for the rest of today’s events:
• UK: Industrial production for Aug. is exp. to rise at the same pace as prev. We see some upside risks to the forecast. Although a positive surprise could support GBP a bit, we remain bearish on sterling overall.
• Canada: Unemployment rate for Sep. is exp. unchanged. This could support CAD.
Join us for more technical and fundamental analysis: http://www.ironfx.com
To get the latest Forex trading news you should:
• Download the IronFX Research app: http://goo.gl/jhQIxO
• Like us on Facebook: https://www.facebook.com/IronFX
• Follow us on Instagram: https://www.instagram.com/ironfx
• Follow us on LinkedIn: https://goo.gl/wSEbPN
• Follow us on Twitter: https://twitter.com/IronFXGlobal
• Circle us on Google+: https://www.google.com/+Ironfxglobal
• Subscribe to our Channel: http://bit.ly/1foFmCU
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