GBP Pushed To New Lows

USD pullback sees familiar levels vs EUR and JPY retested. GBP pushed to new lows but resistance picking up a little. Commodity currencies stay close to better levels. Few drivers to go off this week other than the Brexit fear factor which has seen sterling hitting new lows across the board. Some tentative signs of moderation, but these can turn in an instant. Assurances from government spokesmen including Chanc. Hammond that they are looking to avoid a hard Brexit seems to be falling on deaf ears, but we are seeing some resistance filtering in ahead of .8800 in EUR/GBP, while Cable support either side of 1.2100 has limited to the pressure here temporarily.

GBP/JPY also found some buyers ahead of 140.00, with this helping to lift USD/JPY to a modest degree, but ahead of the presidential inauguration next week as well as the Trump press conference tomorrow, USD bulls are not getting it their own way at this point in time. 115.00 is still looking a little vulnerable in the meantime, while EUR/USD may have found some near term support ahead of 1.0500 to allay any immediate push for lower levels.

Exhaustion was going to impact at some stage, so much of the USD selling has been largely profit taking, and with US yield stabilising, we are in for a period of congestion over coming sessions, though as mentioned, this assumes a well-received public address by the president elect on Wednesday. US data reads saw wholesale inventories rising by a little more than expected at 1.0%, while JOLTS registered a lesser than expected 5.522m read.

Range bound trade in the commodity currencies also, but we saw dip buyers in AUD/USD below .7350 on the back of a brief spike in copper, though base metals have been supported by a healthy set of global PMIs also. NZD is following on the coattails, but lagging slightly to see AUD/NZD grinding higher again. CAD is still on the front foot to test below 1.3200 again – this in spite of another dip in oil prices. A sub USD50.00 will put this support to the test.

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