GBP reaches its lowest level since April against the USD, while commodity-linked currencies benefited from WTI remaining around USD 36/bbl
The notable mover today amid light volumes across asset classes has come in the form of GBP, which has softened across the board. GBP fell gradually over the day with no singular factor behind the move, however it is of note that year and month-end approaches and as such, markets may see some pre-emptive touted month-end buying, although it is unclear whether this has been the case. Also weighing on GBP today is the latest UK public sector net borrowing, which printed higher than expected at 13.6B vs. Exp. 11.1B. As such, EUR/GBP saw strength throughout the session, with this filtering through to GBP/USD which fell below 1.4850 to its lowest level since April.
The EUR strength, stemming from EUR/GBP, weighed on EUR/USD, which broke above 1.0950 with the USD-index ending the European session firmly in negative territory. The lower greenback went on to benefit commodity-linked currencies, with the likes of AUD and NZD significantly stronger today after spot gold managed to hold onto the significant gains seen yesterday amid light newsflow, while the energy complex was granted a period of reprieve today as WTI remained around the USD 36.00/bbl handle ahead of the API crude oil inventories scheduled for aftermarket in the US.
Looking ahead, tomorrow sees a pre-Christmas eve data dump, with highlights including UK and Canadian GDP, US personal income, PCE deflator, durable goods orders, new home sales and University of Michigan sentiment. Separately tomorrow also sees the minutes from last month’s BoJ meeting, while participants looking at commodity-linked currencies will also be looking ahead to DoE crude oil inventories.