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Sterling rallies on jobs data, EUR/USD at 12-month lows

By Piero Cingari

10:23, 16 November 2021

Display of British banknotes in different denominations
Sterling has rallied in response to strong UK employment data – Photo: Shutterstock

The British pound (GBP) is the best performer among major currencies on Tuesday, as UK employment data came in stronger than expected, fostering expectations of a Bank of England rate hike next month.

The US Dollar Index (DXY) is trading 95.43, the highest level since July 2020, while EUR/USD yesterday fell below the psychological level of 1.14, hitting new yearly lows, after European Central Bank (ECB) President Christine Lagarde reiterated that ECB is in no hurry to hike interest rates.

Among low-yielding currencies, the Japanese yen (JPY) continues to trade at a 12-month low against the greenback and the Swiss franc (CHF) recorded four straight sessions of losses versus the US dollar.

High-beta currencies such as the New Zealand (NZD) and the Australian (AUD) dollars softened after yesterday’s rebound, while the oil-backed Norwegian krone (NOK) is higher as Brent crude oil prices rose overnight.

Elsewhere, emerging market currencies slipped, with the South African rand (ZAR) and the Russian ruble (RUB) down 0.3% against the dollar, while the Turkish lira (TRY) hit new record lows versus the greenback.

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Forex Daily Matrix – 16 November 2021

A forex table that compares nine currencies against each other, including USD, EUR, GBY, JPY, CHF, AUD, NZD, CAD and NOKForex daily matrix as of 16 November 2021, 10:30 GMT – Credit:

US dollar

As of writing, the US Dollar Index (DXY) was last at 95.43 level, flat from previous close, and at its highest level since July 2020.

Yesterday, the New York’s Empire State Manufacturing Index rose from 19.8 in October to 30.9 in November, beating market expectations (22.0), signalling a sharp improvement in the business activity.

Today, October data on retail sales and industrial production will be published. Consensus forecasts retail sales to rise 1.5% on the month, while the industrial production is seen expanding at 0.9% from a month ago, after falling by 1.3% in September due to supply-chain bottlenecks and Hurricane Ida.

Meanwhile, expectations on interest-rate hikes continue to rise. Market-based probabilities indicate there is a 68% chance, compared with 43% a month ago, the Fed will begin to raise interest rates in June next year.

The technical picture of the DXY shows that the 14-day relative strength index (RSI) on the daily timeframe chart is approaching the overbought territory.

DXY technical levels:

  • 52-week high: 95.52
  • 52-week low: 89.21
  • 50-day moving average: 93.79
  • 200-day moving average: 92.15
  • 14-day Relative Strength Index (RSI): 69.48

British pound

The British pound (GBP) strengthened against all its peers on Tuesday as UK labour data positively surprised market expectations.

GBP/USD was last at 1.34, up 0.4% from previous close, while EUR/GBP slipped 0.4% to 0.84.


0.63 Price
-0.950% 1D Chg, %
Long position overnight fee -0.0078%
Short position overnight fee -0.0005%
Overnight fee time 21:00 (UTC)
Spread 0.00014


1.05 Price
-0.110% 1D Chg, %
Long position overnight fee -0.0082%
Short position overnight fee -0.0000%
Overnight fee time 21:00 (UTC)
Spread 0.00006


149.10 Price
-0.540% 1D Chg, %
Long position overnight fee 0.0118%
Short position overnight fee -0.0200%
Overnight fee time 21:00 (UTC)
Spread 0.014


1.21 Price
-0.070% 1D Chg, %
Long position overnight fee -0.0047%
Short position overnight fee -0.0035%
Overnight fee time 21:00 (UTC)
Spread 0.00013

Despite the end of the UK government’s job-protection furlough scheme, the number of payrolled employees rose by 160,000 in October from a month earlier and is now above pre-pandemic levels.

The unemployment rate decreased 0.5% to 4.3% for the quarter ending in September, below market expectations (4.5%).

Overall, the UK labour data continues to show strong signs of recovery that raises the likelihood of a Bank of England rate hike in December. The bank’s Monetary Policy Committee indicated in November that higher interest rates would be warranted in the coming months to combat inflationary pressures, if incoming labour market data matched predictions.

Money markets are now fully pricing in (100% probabilities) the bank starts raising interest rates in December, with an implied rate hike of 17 basis point.

GBP/USD technical levels:

  • 52-week high: 1.42
  • 52-week low: 1.31
  • 50-day moving average: 1.37
  • 200-day moving average: 1.38
  • 14-day Relative Strength Index (RSI): 40.85

Chart of the day: Money markets assign a 100% chance of a UK intereste rate hike in December

Bar chart outlining 67.5% probability of a 20 basis point UK interest rate hike on 16 DecemberProbabilities of rate hikes at the 16 December UK MPC meeting – Credit: CME BoEWatch Tool


The euro was last at 1.1362 against the US dollar, breaking down the 1.1400 psychological level and hitting new 12-month lows.

Speaking at the European Parliament, Lagarde reiterated that the central bank is in no hurry to raise interest rates next year, despite inflation remaining elevated for longer than expected.

Recently, the single currency has also been negatively impacted by a resurgence of Covid-19 cases in Europe, with new daily cases reaching last year’s highs and prompting some countries, such as Austria and the Netherlands, to reintroduce restrictions.

Today, preliminary third-quarter labour market data in the euro area shows an acceleration in employment of 0.9% in September, above an expected increase of 0.8%.

In the daily timeframe chart of EUR/USD, the 14-day relative strength index (RSI) made its entrance into the oversold area.

EUR/USD technical levels:

  • 52-week high: 1.2349
  • 52-week low: 1.1362
  • 50-day moving average: 1.1634
  • 200-day moving average: 1.1874
  • 14-day Relative Strength Index (RSI): 28.62

Forex Performance Heatmap – 16 November 2021

Forex performance heatmap comparing major forex currency pairs, and the euro and dollar with other currenciesForex performance heatmap as of 16 November 2021 10:30 GMT – Credit:

Other currency pairs (% change from previous close):

Read more: Forex: USD edges down; high-beta currencies rebound

Markets in this article

0.63025 USD
-0.00603 -0.950%
390.262 USD
1.03 +0.270%
11.48331 USD
0.09622 +0.850%
4.63023 USD
0.00965 +0.210%
11.60549 USD
0.01743 +0.150%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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