The Pound, USD/JPY & Crude Weaken, as Gold Rises

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The Pound, USD/JPY & Crude Weaken, as Gold Rises

一月 10, 2017Daily BriefingBy sharptrader

Currency Market

USDJPY is struggling – The pair is slumping this morning despite a growing consumer sentiment. The consumer confidence index surpassed expectations, reaching 43.1 for December, the highest of 2016. USDJPY reached a low of 115.20. Confidence may not extend over to real consumer spending. Japan’s previous household spending numbers fell %1.5 for the month of November. Will this stronger consumer sentiment be enough to stimulate consumer consumption?

The woes of the Japanese economy are still rampant. Japan’s central bank is going through profound change, striving for 2% inflation while expanding their balance sheet to curtail deflation. Recent economic data shows a slow-down of stimulus in the Japanese economy. With an uncertain outlook for Japanese growth, the direction of the Yen is questionable.

The pound continues to drop as worries of a hard Brexit prevail – The pair is now hovering above 1.21. The decline reflects the negative outlook for the United Kingdom, a sentiment which may continue if the pair goes below breaches it’s support level of 1.20. European pressures continue to loom over the pound, relief for the currency could be postponed until a more concrete exit strategy is revealed.

The EURUSD is recovering after hitting 14 year lows – The advance of the dollar has been largely attributed to the fiscal stimulus president-elect Donald Trump has proposed. The greenback is around 8% above its’ 20-year average.

Commodity Market

Crude Oil continues to fall as US drillers threaten to undue OPEC’s efforts – Inventors remain uncertain about the supply of the Oil. OPEC cartel members are gearing up to meet this week to discuss strategies on how to curtail production of the commodity to help boost prices.

Gold hits the highest point the commodity has reached in over a month – Investors are seeking shelter in the safe-haven commodity to hedge against geopolitical risk. Worries circulating around the possibility of a ‘hard Brexit’ were highlighted on Sunday as Theresa May announced that the UK would be leaving the single market. Additionally, as Donald Trump’s inauguration gets closer, investors may retreat from more volatile stocks, favouring gold instead.

Market Watchlist

The Nasdaq 100 is climbing higher – The driver of the increase in the index is thanks to Apple’s advances of 1.88%. Apple is expected to report earnings on the 31 of January.