Pound Climbs Amid Risk Appetite

The pound advanced against its key counterparts in early European deals on Thursday amid risk appetite, as European shares rose following firm cues from Asia and Wall Street, as investors shrugged off signs of inflation pickup in the U.S. and the possibility of an interest rate increase at next month’s Fed policy meeting.

The German DAX was up over 1 percent, France’s CAC 40 index was rallying 1.7 percent on the back of upbeat earnings reports and the U.K.’s FTSE 100 was moving up 0.6 percent.

Investors focus on key economic data, including reports on producer prices, industrial production and homebuilder confidence for more direction.

Oil held firm after data showed a less-than-expected rise in U.S. crude inventories and Saudi Energy Minister Khalid al-Falih affirmed willingness to withhold production throughout 2018.

In brief remarks during a ceremonial swearing-in, new Fed Chairman Jerome Powell said the Federal Reserve will seek to normalize its policies in a way that will extend the recovery and bolster its goals of achieving stable inflation and maximum employment.

He also said that the Fed will keep an eye on financial-system risks following the recent wild swings in financial markets.

The currency traded mixed in the Asian session. While it fell against the yen and the franc, it held steady against the euro. Against the greenback, it advanced.

Extending early rally, the pound firmed to a 10-day high of 1.4077 against the greenback. The pound is seen finding resistance around the 1.43 level.

The pound recovered to 149.95 against the Japanese yen, from a low of 148.94 hit 9:30 pm ET. If the pound extends rise, 153.00 is seen as its next resistance level.

Data from the Ministry of Economy, Trade and Industry showed that Japan’s industrial production grew more than initially estimated in December.

Industrial production advanced a seasonally adjusted 2.9 percent month-over-month in December, faster than the 2.7 percent rise reported earlier.

Having fallen to 1.2967 against the franc at 2:30 am ET, the pound spiked up to a 6-day high of 1.3036. The next possible resistance for the pound is seen around the 1.32 area.

The pound advanced to a 2-day high of 0.8869 versus the euro, from a low of 0.8902 seen at 2:30 am ET. On the upside, 0.87 is likely seen as the next resistance for the pound.

Data from Eurostat showed that the euro area trade surplus increased in December from the previous month on higher exports.

The trade surplus rose to a seasonally adjusted EUR 23.8 billion in December from EUR 22 billion in the previous month. The expected level was EUR 22.3 billion.

Looking ahead, U.S. PPI and industrial production for January, NAHB housing market for February, weekly jobless claims for the week ended February 10 and New York Fed’s empire manufacturing survey for February as well as Canada existing home sales for January are set for release in the New York session.

At 1:30 pm ET, the Bank of Canada Deputy Governor Lawrence Schembri speaks at the Manitoba Association for Business Economics in Winnipeg.

The material has been provided by InstaForex Company – www.instaforex.com

Source:: Pound Climbs Amid Risk Appetite

Won't your trader friends like this?
InstaForex
About the Author
InstaForex brand was created in 2007 and at the moment it’s a top choice of more than 2,000,000 traders. More than 1,000 clients open accounts with InstaForex every day. All InstaForex clients get great opportunities for effective trading on the forex market, as well as on-time technical and customer support

Related Posts

Leave a Reply

*