Intraday Market Thoughts

Pound Rises Most in 3 Months

by Adam Button
Feb 12, 2014 23:14

The pound roared toward the cycle high even after Carney moved the goalposts on forward guidance. GBP was easily the top performer while the euro lagged. The Australian dollar stalled ahead of the January jobs report.

Carney struck a dovish tone in comments on Wednesday saying he won't take any risks with the recovery, a signal that he's not eager to hike rates. The market was focused on the BOE inflation report and its higher economic projections.

Cable jumped on the report in European trading but continued higher through US and Asian trading, hitting 1.6619, less than a half-cent from the January cycle high.

Otherwise, US trading was muted as the euro consolidated a fall after Coeure strongly hinted at negative deposit rates. Yen trading was lackluster as risk sentiment and the S&P 500 were flat.

One thing that's thankfully off the agenda for more than a year is the US debt ceiling after the Senate voted to lift it until March 2015. Yellen's scheduled testimony for Thursday has also been postponed due to a US winter storm.

The Australian dollar was on a roll heading into US trading as it rose to a one month high at 0.9067 but the gains disappeared with traders cautious ahead of the January employment report. Numerous jobs reports have disappointed in the past year and the market is looking for 15K jobs gains in this one, which is due at 0030 GMT. This report includes benchmark revisions so it could be especially messy.

Our existing Premium trades include USDJPY, USDCAD and AUDCAD, while GBPUSD hit its final target.
Act Exp Prev GMT
Fed's Yellen Speech
Feb 13 15:00
Employment Change s.a. (JAN)
15,000 -22,600 Feb 13 0:30
Fulltime employment (JAN)
-31,600 Feb 13 0:30
Part-time employment (JAN)
9,000 Feb 13 0:30
Unemployment Rate s.a. (JAN)
5.8% 5.8% Feb 13 0:30

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