GBP Can’t Stop the Bleeding | Low Liquidity Expected Ahead of Holiday-Shortened Week
Published December 23, 2019
The pound just can’t stop falling. After finishing last week with its biggest weekly decline in three years, GBP is continuing to selloff as fears of a no-deal Brexit have usurped the initial euphoria of the election results. The strong US dollar and empty economic calendar aren’t doing the pound any favours, as markets have little else to trade on besides the pessimistic Brexit headlines.
FX pairs are likely to see choppy price movements over the next week or so, as traders head home for the holidays and take market liquidity with them. Canadian markets are closed on the 25th and 26th, while US markets are shutdown on the 25th.
This morning’s Canadian GDP release slightly missed expectations and showed a month-on-month decline for the first time in eight months. While the services-producing industries were mostly unchanged, production from goods-producing industries declined 0.5% and weighed on real GDP. Despite the miss there isn’t much reaction from USD/CAD just yet, as the disappointing US Durable Goods data provided a helpful counterbalance for the loonie.