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FX round-up: Pound near YTD lows against US dollar, won near 52-week highs

By Alexander Bueso

Date: Monday 30 Apr 2018

FX round-up: Pound near YTD lows against US dollar, won near 52-week highs

(Sharecast News) - Sterling finished the session only slightly weaker, despite early sharp selling on news of Home Secretary Amber Rudd's decision, at the weekend, to stand down from her post.


News of her resignation saw the pound drop to 1.3712 against the US dollar early during the session on Monday, trading to within just a whisker of its year-to-date lows of 1.3710.

Yet by 2040 BST, it had recovered to trade down by just 0.11% at 1.37657, thanks to the release of a spate weaker-than-expected data in the States, including a lower than expected reading on the US Federal Reserve's favourite inflation gauge, the 'core' price deflator for personal consumption expenditures.

To take note of, the loss of the YTD lows could pave the way for a test of cable's 200-day moving average, then at 1.3520, said Michael Hewson, chief market analyst at CMC Markets UK.

"We need a move back above the 1.3920 area to stabilise and target a return to the 1.4020 area," Hewson added.

The single currency on the other hand continued to weaken against the Greenback and was trading 0.42% weaker at 1.20797, dragged down by a weaker-than-expected reading on German retail sales volumes for March.

As an aside, taking a so-called 'contrarian' view, in remarks to Bloomberg TV analysts at HSBC said they expected euro/dollar to trade down towards 1.15.

Nevertheless, it was mostly a 'risk-on' day in markets, with dollar/yen up by 0.22% to 109.288.

Also in Asia Pacific, the Aussie was substantially weaker against the greenback, retreating 0.67% to 0.75297.

That was despite the release of a slightly stronger-than-expected reading on the 'official' Chinese factory sector Purchasing Managers' Index for April that came in at 51.4 for April, down from a reading of 51.5 in March (consensus: 51.3).

On the other hand, the US dollar was on the back foot versus the South Korean won, shedding another 0.80% to 1,068.5, which was a shade above its 52-week lows and not far from its weakest in over four years.

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