FX round-up: Sterling endures torrid time as jobs data, Brexit ratification cheer fades

Sterling endured a torrid time on most major crosses today as it reversed initial cheer after UK jobs data, and shrugged off hopes stoked on Tuesday of a parliamentary ratification of Brexit.

At about 16:44 BST, sterling was down 0.01% to $1.2297, but up 0.08% to €1.1208. The dollar-spot index was down 0.02% to $97.871.

The British unit's performance against commodity currencies was worse, falling against the aussie, loonie, kiwi, rand and yen, with this turn broadly replicated by the US-dollar, too.

HL Currency Service senior analyst Chris Saint noted sterling rose to a one-week high of $1.2332 after the labour market report, but soon eased back to about $1.23.

UK's unemployment rate held at 4.9%, as expected. However, the number of people out of work rose by 10,000, the first rise since the three months to February. Jobless claims rose less than expected and average weekly earnings gained in line with forecasts.

"While this jobs data is unquestionably impressive, it's a shame that upside gains on the Sterling may be capped by hard Brexit fears," said FXTM research analyst Lukman Otunuga.

He added that sterling bulls had been installed with "false inspiration" on Tuesday, following government lawyer James Eadie suggesting it was "very likely" MPs would ratify any Brexit deal.

"The battle of words between political heavy weights has placed the pound on a chaotic rollercoaster ride with uncertainty waiting at the end of the tunnel," Otunuga opined.

SpreadEx financial analyst Connor Campbell was already looking ahead to the European Central Bank (ECB) revealing the results of its October meeting on Thursday.

"While it is unlikely that (ECB president Mario) Draghi will announce anything concrete this week, analysts are still expecting some kind of extension or tweak to the current programme before the year is over, so investors will be searching for clues as to what these might be.

"More pressingly, last week's rumour that the central bank is preparing to 'taper' its bond-buying programme means the tone of Draghi's statement will be important, regardless of the fact that the ECB have already denied the report."

Stateside, US attentions were focused on several housing data, with a strong print hoped by some in the market to hold the dollar-spot index above resistance at $98.00. It did not happen.

US housing starts surprisingly fell 9.0% month-on-month to reach an annualised pace of 1.047m, Department of Commerce said. Consensus was for starts of 1.173m.

On a more upbeat note, US housing permits, which are widely considered to be a lead indicator for the sector, gained 6.3% month-on-month to 1.225m, versus consensus for 1.16m.

Despite that, Tuesday's dollar weakness continued.

"Investors re-assessed the likelihood of the Federal Reserve raising US interest rates this year," said Otunuga.

"Although there is still optimism over the Fed raising rates in December, the fears of a rate increase not being a 'done deal' could pressure the dollar."