Summary:

  • GBP set for the biggest weekly gain since June 2016

  • Bitcoin tries to recoup recent losses

  • Fate of the German coalition still undecided

European benchmarks followed into the footstep of their Asian peers posting decent gains. JPY remains the strongest currency in the G10 basket. Euro extends its gains against US dollar. Gold prices move higher amid USD weakness. Oil prices decline slightly.

UK retail sales dropped more than expected in the last month of 2017 as stores witnessed a lull following Black Friday in November. Even as the underlying trend remains tilted to the downside, the British currency seems to play down the weaker print being set for its best weekly close since June 2016.

Bitcoin has had a tough week so far as it plunged almost toward $9,000 before sharply rebounding back above $11,000. The major factor standing behind such incredible volatility was South Korean as it’s still considering a ban on all cryptocurrency trading. While the Bitcoin price bounced back quite significantly bears seem to be still better positioned.

US equities declined slightly on Wednesday as the possible government shutdown is still on the cards. Most of the major benchmarks from Asia posted gains with only Australian ones declining. European opening was mixed as the concerns over the forming of German government coalition prevail.

Despite a rise of the US 10Y yield well past 2.6% on Thursday, the US dollar was unable to benefit from it. As a result, the EURUSD is still trading much above 1.2250 at the time of writing being the feeblest currency in the whole G10 basket. Along with the USD the NZ dollar is also falling in early trading, however losses have not been severe thus far.

Looking at today’s economic calendar one can spot we still have some important data ahead of us. First, manufacturing sales print from Canada is going to be released thus an increased volatility on FX pairs tied to CAD may surface. Later on, a preliminary release of Michigan Consumer Sentiment Index is going to draw attention of USD traders.