• World Economic Forum kicks off
  • Bank of England may be looking to raise rates
  • Sterling surges on Theresa May comments
  • USD weaker on Trump comments

The World Economic Forum, which the NY Times called “the world’s most expensive networking event”, has kicked off in Davos Switzerland, and it is already moving currency markets in a big way.

The pound climbed the most since July thanks to a speech from Prime Minister Theresa May early this morning. May laid out her 12 step plan for a clean Brexit, and announced that the ultimate agreement would be subject to parliamentary approval. Theresa May’s efforts seems to have allayed investor’s concerns of near-term Brexit uncertainty. She also announced that the terms of Brexit would be subject to a vote in both houses of parliament, making the contentious Supreme Court decision on whether she needs to have parliamentary approval irrelevant.

Bank of England Governor Mark Carney’s remarks last night were seen as hawkish, adding fuel to the fire that is the GBP as we kick off the week. Carney noted the resilience of the UK economy, citing that the British people are “looking through Brexit-related uncertainties,” citing signs of continued solid consumer momentum.” A BoE that is inclined toward raising interest rates would be a catalyst for a stronger pound.

Donald Trump made waves in speaking with the Wall street Journal about China. He expressed concern that the dollar was too strong, blaming China for suppressing its currency. With US policy as a top determinate for the dollar in the year ahead, Donald Trump’s comments are likely to continue to sway USD moves. A survey suggests that investors are increasingly concerned about an uncertain future under s Trump presidency.

EURUSD:   A weaker USD has EURUSD flirting with the 1.07 handle.

GBPUSD:  Cable is the unstoppable freight train in FX markets today, up almost 2.75% against the USD.

USDJPY: Yen strength combined with a weaker dollar took USDJPY below 113, though traders have been reluctant to keep it below this mark suggesting a firm support in this area.

USDCAD: Dollar/CAD is down a cent, but looks to be stabilized compared to some of the other USD trades.