- Forex today was slow, and most currencies quiet given the Thanksgiving holiday in North America, and instead, the focus stayed on the European markets.
There was a risk-off tone due to the political angst despite some positive developments the Brexit saga. As analysts at Westpac explained, EU and UK negotiators completed amendments to the initial draft withdrawal agreement faster than expected.
“Although Spain voiced concerns over Gibraltar, EU spokesmen stated that there would be an additional document to cover Gibraltar and fishing rights (French concerns) so that the EU leaders can meet on Sunday to support the withdrawal agreement. UK PM May also stated that she and Spanish PM Sanchez had reached agreement,” the analysts explained.
However, the risk mood had been soured on Wednesday with the European Commission’s new rejection of the Italian budget which is the first step in disciplinary procedures that may lead to hefty fines. The Commission said Italy has “seriously violated” EU budget rules.
Currency action
EUR/USD rose from 1.1400 to 1.1434 but retraced, falling back from the European highs of 1.1434 where the pair made a low of 1.1391 at the start of the North American time zone. Today’s Euro-area consumer confidence slipped to -3.9 (last:-2.7, mkt: -3.0), its lowest reading since March 2017 and reasserting 2018’s downward trend after October posted a small rise. The outperformer was the pound, rallying on positive Brexit progress, spiking from 1.2780 to 1.2927 and closing around 1.2881. EUR/GBP dropped heavily from 0.8923 to a low of 0.8841 before with some choppy price action morphing into a sideways drift. USD/JPY was also a sideways drift between 112.92 and 112.98. AUD/USD managed to maintain form despite the risk-off session in Europea markets, ranging between 0.7240 and 0.7260.
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