Market News & Analysis


Top Story

GBP/USD Slumps As Brexit Back In Focus & On Stronger Dollar

Sterling was out of favour on Wednesday as the focus turned back to Brexit and the UK’s future relationship with the EU. European Commission President Ursula von der Leyen marked out her red lines, warning the UK to stick closely to EU rules if it wanted to arrive at a far-reaching trade deal with the EU. 

A level playing field is what the EU are looking for. Time will tell whether it is what Boris Johnson is prepared to offer. The pound remains under pressure as traders doubt whether 1 year will be sufficient tine to agree a deal.

Dollar Advances After Strong ADP Data
The US dollar was on the front foot at the start of Wednesday boosted by flows into safe haven assets. Yet even as US – Iran tensions eased, and risk sentiment picked up the dollar remained firm thanks in part to strong ADP data.
 ADP private payroll report added a whopping 220,000 jobs in December, this was well ahead of expectations of 160,000 jobs and November’s 67,000 jobs created. Despite the impressive data, the dollar is paring gains, as flows towards riskier assets pick up.


Up Next
The British Parliament is expected to vote through the Brexit Withdrawal Bill tomorrow. No hold ups are expected. As tension continues t ease in the Middle East US dollar investors could turn their attention towards Friday’s NFP.

Levels to watch
Cable is lacking bullish momentum on 4 hrs chart, below the $1.32 handle and below the 50 sma. GBP/USD is testing support at $1.31. A breakthrough here could see the price test $1.3055 opening the door to $1.30. A break above $1.3212 could bring a more bullish outlook.


Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.