Pound Holds Steady ahead of Jobs Data

GBP

The British pound was almost unchanged against rivals ahead of key economic data. Recently, the soft economic data increased the chances of an interest rate cut by the Bank of England later this month to support the slowing economy. Market participants are looking forward to the jobs data to grasp further insight on the economic performance and assess the future path of interest rates. Currently, the CME BOE Watch Tool is showing a probability of 72% that the bank will lower interest rates by 25 basis points on the January 30 meeting. The GBPUSD is trading slightly below $1.30, the GBPJPY dipped to 142.86, and EURGBP held steady near 0.8530.

USD

The dollar index, which measures the greenback against a basket of major currencies, held steady above 97.60 awaiting fresh fundamental drivers. DXY gained some strength on the back of dropping European currencies. The euro and pound account for almost 70% of the dollar index basket. Currently, the British pound is under pressure due to mounting rate-cut prospects while the euro is in a cautious mode ahead of the first European Central Bank meeting this year, where the bank will likely launch a comprehensive review of its policy and targets.

Metals

Gold prices retreated from a two-week high despite a slight demand for safety. The pneumonia-like virus that is spreading in China affected slightly the risk appetite. The price of a gold ounce is trading below $1560, the price of a silver ounce is steady near $18, while palladium posted another record high of $2531.

Oil

Oil prices surrendered earlier gains as supply concerns faded. Oil benchmarks kicked off the week on a strong note following the announcement of the Libyan National Oil Company that production in two big oil fields will shut down due to pipeline blocking. However, market participants expect this shortage to be covered by OPEC's spare capacity. OPEC spare capacity stands at 3 million barrels while the drop in Libyan production is estimated to be around 800,000 barrels per day. The West Texas Intermediate crude futures declined to $57.97, and Brent futures tumbled to $64.38.

Major Economic Events

Disclaimer 

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