Daily FX Wrap: Pound heavy as talks once again stall
The pound suffered in the European afternoon, as EUR/GBP broke through the 0.90 handle. The bearish attack on Sterling coincided with comments from the EU’s chief negotiator, Michel Barnier, who stated that there has not been enough progress to move onto the next stage of Brexit talks, as the UK would like. Barnier went on to express his concerns, commenting on the ‘state of deadlock which is very disturbing’.
EUR/GBP now looks toward 0.9050 and September 14th’s high, as Cable’s bearish push has forced the pair back down through the 1.32 level, and below Tuesday and Wednesday’s lows.
The greenback’s recovery has continued through the day, as the DXY ran into bids at 92.80, and reclaimed the 93.00 handle. The marginally better than expected US PPI data (2.6% vs. Exp. 2.5%) paved some continued buying of the dollar, however, this was not so evident against the JPY.
USD/JPY has been highlighted by options activity this week, with over 5bln expiries already noted and the theme continued today via 7.5bln+ between 112.00 and 113.05. USD/JPY has consolidated in this range for the majority of the session, with neither bears nor bulls expressing any clear desire.
A slew of speech through the latter part of the session will be highlighted by ECB President Draghi. Offers through 1.1840 –1.1880 in EUR/USD have held, with the latter level firmly rejected, resulting in a break through the week’s support trendline.
12 Oct 2017 - 15:30- ForexResearch Sheet- Source: RANsquawk
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