Date: FEBRUARY12, 2019
Daily World Economic and Financial News
(CNBC): FEBRUARY12, 2019--- The dollar held steady versus its peers on Tuesday, hovering close to its 2019 high as U.S.-Sino trade tensions and global growth worries underpinned the greenback's safe-haven appeal.
(CNBC): FEBRUARY12, 2019--- The greenback rose 0.1 percent against the yen to 110.47 and was a touch higher versus the Swiss franc at 1.0040. The dollar index was steady at 97.04, after advancing 0.45 percent in the previous session, its largest percentage gain since Jan. 24. The index has risen for eight straight sessions, mainly thanks to a tumbling euro, which has the largest weighting in the index. The single currency was relatively unchanged at $1.1278 in Asian trade, having lost nearly half a percent on Monday. The euro has weakened for six consecutive sessions, and traders expect further losses now that the crucial psychological support of $1.13 has been broken.
(CNBC): FEBRUARY12, 2019--- sterling was 0.15 percent firmer at $1.2869, after tumbling 0.75 percent in the previous session. Analysts expect the British pound to remain volatile due to the uncertainty surrounding Brexit. The British parliament is set to hold a debate on Brexit on Feb. 14 where Prime Minister Theresa May is seeking changes to her deal with Brussels after it was rejected by a record majority in parliament last month.
(CNBC): FEBRUARY12, 2019--- The Australian dollar, often considered a gauge of global risk appetite, gained around 0.3 percent to $0.7083 as risk sentiment improved on expectations that U.S. lawmakers had reached a tentative deal on border security funding that would avert another partial government shutdown due to start on Saturday. Traders expect the Aussie to remain under pressure after Reserve Bank of Australia Governor Philip Lowe tempered a long-held tightening bias last week, saying an easing might be just as likely as a hike.
(CNBC): FEBRUARY12, 2019--- The kiwi dollar was steady at $0.6730. New Zealand's central bank is expected to leave interest rates unchanged at its policy meeting on Wednesday but may adopt a more dovish tone and cut forecasts, in line with other major central banks as rising global economic risks cloud the outlook.
(CNBC): FEBRUARY12, 2019--- Gold fell on Monday as investors looked to the safety of the dollar to stave off risks from the U.S.- China trade spat, as concerns mounted over a slowdown in global growth. Spot gold fell 0.42 percent to $1,308.47 per ounce by 10:26 EST, after having risen for the previous two sessions. U.S. gold futures declined 0.49 percent to $1,312 per ounce.
(REUTERS): FEBRUARY12, 2019--- Oil prices rose on Tuesday amid OPEC-led supply cuts and U.S. sanctions against Iran and Venezuela, although analysts expect surging U.S. production and concerns over economic growth to keep markets in check. U.S. West Texas Intermediate (WTI) crude oil futures were at $52.78 per barrel at 0329 GMT, up 37 cents, or 0.7 percent, from their last close.
(REUTERS): FEBRUARY12, 2019--- Sterling weakened on Monday after data showed that Britain’s economy last year grew at its slowest since 2012, with Brexit uncertainty hitting investment and the slowdown accelerating at the end of 2018.
Sterling is trading little changed well below 1.2900 amid Brexit stalemate and deteriorating economic fundamentals including manufacturing output fall and GDP slowdown published on Monday. The Bank of England Governor Carney speech headlines the agenda on Tuesday.
The Brexit uncertainty remains the biggest challenge for UK. Sterling is expected to weaken at the beginning of 2019 and rebound sharply after the Brexit uncertainty fades away. Sterling is set to chart a check mark symbol in 2019. With the UK government still working its way to the UK parliament with the Brexit agreement approval, the Brexit uncertainty is set to prevail the end of 2018 and the beginning of 2019.
1. Technical Overview
From a technical perspective, the overnight slide back below 100-day SMA, also coinciding with 38.2% Fibonacci retracement level of the 1.2396-1.3218, now seems to have opened room for further downside towards testing confluence support near the 1.2820-1.2800 region. The mentioned support comprises of 50% Fibonacci retracement level and the lower end of a short-term descending trend-channel, which if broken might negate prospects for any near-term up-move and turn the pair vulnerable to extend its recent downfall.
On the flip side, the support break-point, near the 1.2890-1.2900 region now seems to act as an immediate resistance, above which the recovery could get extended but seems more likely to remain capped near the trend-channel resistance, currently near mid-1.2900s.
2. Fundamental Overview
The British Pound remained depressed at the start of a new trading week and weakened further following the disappointing release of UK macro data, showing that the economy contracted 0.4% m/m in December. Meanwhile, the quarterly growth rate fell to 0.2% during the fourth quarter of 2018 and the yearly rate slowed more than expected to 1.3%. Adding to this, a sharp deceleration in the UK industrial and manufacturing production data, coupled with slightly higher than expected UK trade deficit figures further dented the already weaker sentiment surrounding the British Pound.
On the other hand, the US Dollar added to its recent winning streak and climbed above the 97.00 handle, levels not seen since December. Despite increasing chances of another partial US government shutdown, the greenback benefitted from a fresh leg of an upsurge in the US Treasury bond yields and got an additional boost following some optimistic comments by White House senior counselor Kellyanne Conway, saying that the US President Donald Trump may still meet Chinese President Xi Jinping in the near future and that it looks like the US and China are getting closer to deal.
The GBP/USD pair came under some intense selling pressure and touched a three-week low level of 1.2845, albeit the bearish pressure now seems to have abated as market participants now look forward to the BoE Governor Mark Carney's scheduled speech for some impetus. The UK PM Theresa May will address the parliament and provide an update on Brexit talks but the major focus will be on the parliament debate taking place on Thursday, February 14.
International & Financial Terms
- Recession: a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
- Plummeted: fall or drop straight down at high speed.
- Speculation: investment in stocks, property, or other ventures in the hope of gain but with the risk of loss.
- Ventures: dare to do something or go somewhere that may be dangerous or unpleasant.
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