10/ 09/ 2019

Dollar buoys on Trade-deal progress & growing risk appetite over EU & Brexit

The dollar drifted lower on Monday later session as investor appetite for higher risk currencies found support on a report of German stimulus plans, diminishing chances of a no-deal Brexit and hopes of a breakthrough in the Sino-U.S. trade war. The mood lifted the Australian dollar AUD to a six-week high of $0.6875 and the pound GBP also hit a six-week high of $1.2385 as a British law blocking a no-deal exit from the European Union came into force.

Sterling, meanwhile, barely shifted when Britain’s parliament voted, as expected, to stymie Prime Minister Boris Johnson’s bid for an early election, which prompted him to vow that he would secure a Brexit deal at an EU summit next month. Conte Prime Minister of Italy winning the Confidence Vote seems to boost the possibilities of ECB easing Monetary Policy. The euro also rallied to as high as $1.0167 following a Reuters report that Germany may set up public investment agencies to boost fiscal stimulus without breaching national spending rules.

It’s a relatively quiet day on the economic data front, which could test market resolve. There’s a lot riding on a dovish ECB

09/ 09/ 2019

Week Ahead | Euro conservative ahead of ECB Meeting amid worries about Growth

The euro was on the back foot earlier today ahead of a European Central Bank meeting later this week at which policymakers are expected to deliver new stimulus to bolster a flagging regional economy. Heightened expectations for an ECB easing come as other global central banks move to loosen the monetary spigot with the People’s Bank of China on Friday taking steps to boost lending. Adding to the calls for central bank easing are signs the global economy is struggling with China’s exports unexpectedly falling in August, data released on Sunday showed. “The ECB is the big game in town globally this week, and the market is more comfortable with the Federal Reserve cutting rates, so I think the market is probably risk neutral.” Stated by leading market analysts. Sterling edged lower as political uncertainty about how the UK would complete its divorce with the European Union by an Oct. 31 deadline dented appetite for the pound.

UK lawmakers passed a bill to force Prime Minister Boris Johnson to delay Brexit if no deal could be made. Johnson’s push for general election in October also failed so far. Pound will continue to pay attention to UK political and Brexit developments. Traders are likely to take their cues from the ECB as major central banks line up support measures for a weakening global economy.

It’s a big week ahead. Brexit and British politics will grab the headlines ahead of the ECB policy decision and press conference on Thursday.

05/ 09/ 2019

No-Deal Brexit Court Hearing & US NFP takes Center Stage

Risk-sensitive currencies such as the Aussie and yuan rallied yesterday as investors cheered the announcement of U.S.-China trade talks for next month and abandoned safe haven assets such as yen. The early-October talks will be held in Washington, China’s commerce ministry announced, following a phone call between China’s Vice Premier Liu He, U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer. The news followed optimism that a no-deal Brexit could be avoided, which sent the pound sharply higher, and a potential breakthrough for the Hong Kong political crisis. Those political developments, seen as positive for investment, also fueled a jump in Asian equities and bond yields. The pound sat around $1.2245 and euro at $1.1030, holding overnight gains.

It had climbed after British parliament voted on Wednesday to prevent Johnson from taking Britain out of the European Union without a deal on Oct. 31, but rejected his first bid to call a snap election two weeks before the scheduled exit.

Markets will embrace for UK No-deal Brexit Court Hearing today & US NFP & Jerome Powell’s speech tomorrow.

04/ 09/ 2019

Weak ISM pushes Dollar off the edge while Brexit delay boosts Pound

The dollar pulled back on late Tuesday as weak U.S. manufacturing stoked wagers on aggressive policy easing, manufacturing activity in the world’s biggest economy contracted for the first time in three years last month, according to the Institute for Supply Management. While the British Pound recouped losses in the wake of a parliamentary vote that opened the door for another Brexit delay.

British lawmakers defeated Boris Johnson in parliament on Tuesday in a bid to prevent him taking Britain out of the EU without a divorce agreement, prompting the prime minister to announce that he would immediately push for a snap election.The government was defeated by 328 to 301 on a motion put forward by opposition parties and rebel lawmakers in Johnson’s party - who had been warned they would be kicked out of the Conservative Party if they defied the government.

Today focus of the markets will be around AUD Gross Domestic Product, ECB Retail Sales & Multiple Fed Member Speech.