Kiwi underperforms in light US trading

Key Movers

With very little in the way of local economic data the Australian Dollar struggled to mount any significant directional momentum through trade on Thursday moving between a low of 0.7234 and a high of 0.7268 vs the Greenback. Trading was also thin with the US celebrating their annual Thanksgiving holiday however Brexit news still kept investors on the edge of their seats.


A draft Brexit deal has been agreed upon between the UK and the European Union. EU members are expected to finalise the deal on Sunday at a summit, but the main hurdle will be to pass the UK parliaments early December. AUD/GBP dropped on the back of this currently sitting at 0.5626 at the time of writing.



In the absence of any domestic flows today we are likely to see limited ranges in the pair.


On the technical front, support sits at 0.7225 followed by 0.7200. On the upside, resistance sits at 0.7265 and 0.7300


A massive session for the Sterling overnight as positive Brexit headlines filtered through to markets, lifting the domestic unit from 1.2780 to 1.2927 against the greenback. It was not able to maintain this level for long as it retreated almost 50 pips to settle around the 1.2880 handle amidst a backdrop of light liquidity given the thanksgiving holiday in the USA.


The news that EU and UK Brexit negotiators had completed necessary amendments to the initial draft withdrawal agreement faster than expected was welcome news for a weak sterling. EU leaders are expected to meet on Sunday in support of the agreement, even despite Spain raised concerns over Gibraltar. These fears were quickly alleviated as EU spokesmen stated an additional document would be drafted which covers Gibraltar as well as concerns over fishing rights. Prime Minister May was quick to state that she and her Spanish counterpart had reached an agreement ahead of the weekend.



On the data front, the EU Brexit summit which is scheduled for Sunday will be vital for the direction of the pound. Any deviations from market expectations of a deal being finalised will really hurt the Pound. Outside of the domestic economy we also see Canadian retail CPI for October and a raft of flash PMI’s out of Japan, USA and the Eurozone. Technical levels to consider for the GBP/USD are 1.2800 and 1.2720 on the downside whilst upside moves are expected to meet resistance on moves approaching 1.2930 and 1.3000 respectively.


There was little activity in overnight trading for the Greenback ahead of Thanksgiving and volumes remained relatively low considering the volatility earlier in the week. The USD opens this morning 0.24% down at 96.48 on the US Dollar Index.

The North American market shifted its focus away from capital markets and enjoyed a day off which saw a distinct lack of trading activity through the overnight session. The Greenback otherwise held its ground for much of the session and moved within a tight range across a broad range of currencies. There were some movements with US counterparts but besides the Great British Pound it was mostly marginal. Risk sentiment continues to weigh on the market with Gold prices being the firm winner in global markets.







Friday looks a little livelier for global markets but the US is set to continue enjoying a quiet day on the economic calendar. Focus will remain on the headlines and the equity market for any sign in changes in risk-sentiment.


The Euro lifted 0.2% against the greenback overnight following news that a draft agreement for Brexit has been approved in principle between the UK and EU Commission. It was not so rosy against the Great British Pound as investors flooded back into Sterling sending the EUR/GBP 0.65% lower following the announcement to an overnight low of 0.8850.

The European Union Council President Donald Tusk stated the draft has been “agreed in principle at a political level”. Meanwhile UK PM Theresa May told MP’s it would deliver the Brexit that people voted for over two years ago in June 2016.




EUR/USD saw an intraday high of 1.1430 and with the focus on Brexit negotiations taking place. The minutes from last month’s ECB meeting showed little to get excited about as notes showing the current stance to remain patient as growth remains optimistic and a neutral outlook is maintained. The ECB kept their interest rates on hold at record lows, with markets pricing a 65% of the first hike in November 2019.

The Single currency opens this morning testing support at the 1.1400 handle as investors look towards several Manufacturing and Service releases this evening in the EU.


Despite the thin trading conditions, due to the Thanksgiving holiday in the United States, the Canadian Dollar did manage to marginally appreciate against its Southern neighbour. Opening this morning at 1.3192, the Loonie appears to be the beneficiary of a weakening Greenback rather than fundamental strength.

There was little to excite markets on the public holiday but the Canadian Dollar did receive a slight boost as risk sentiment began to recover. Capital flows reversed out of safe-haven currencies slightly and into more risk-aligned currencies such as the CAD. The Loonie was also well supported by a slight increase in Oil prices but as with most things during the session, it was a marginal change at best.



Moving into the close of the week the Canadian Dollar is set to enjoy a bit more activity with month-on-month CPI readings and Core Retail Sales to digest.