04/ 04/ 2019

Cautious on Risk Focus Shifts to Brexit, Trump-Liu Meeting

Pound Sterling uplifted during the day over hopes developed around easing Brexit. This positive behavior of the cable increased multifold after UK PM Theresa May managed to convince the opposition leader Jeremy Corbyn to compromise on delay in Brexit to prevent disorderly departure on 14th April without a deal. The lower house of the British parliament on Wednesday approved legislation which would force May to seek Brexit delay. U.S. economic data published on Wednesday fell short of market expectations, hindering the U.S. dollar. 

The EUR/USD pair gained ground this Wednesday to its highest for this week, as better-than-expected growth-related news coming from China and the EU, lend support to the shared currency, while a poor US ISM Non-Manufacturing PMI played against the greenback. 

02/ 04/ 2019

Sterling strengthens as May faces pressure to go for soft Brexit

U.S. economic data was not so rosy. U.S. retail sales fell at the headline and core levels despite expectations for gains. Federal Reserve stepping aside from raising Interest rate between now and the end of the year at least where an on the other side Brexit is continuously causing major volatility in the British Pound. Recent investors reaction to weaker than expected US inflation data support the idea of losing momentum in US economy.

GBP will be under pressure mainly because of Brexit uncertainty and previous disappointing data on Construction PMI which shows business conditions in the UK construction sector with so many Brexit uncertainties. Outside of the numbers, it goes without saying that Brexit will be the key driver.

01/ 04/ 2019

Week Ahead | Brexit & Major Economic Data to Drive the Market

Federal Reserve stepping aside from raising Interest rate between now and the end of the year at least where an on the other side Brexit is continuously causing major volatility in the British Pound. Recent investors reaction to a weaker than expected US inflation data support the idea of losing momentum in US economy. UK prime minister Theresa May’s proposed deal to pull Britain out of the European Union fell flat for the third time on Friday which benefited Dollar recover weaker than expected US Inflation report.

The euro struggled near a three-week low, Dutch central bank Governor Klaas Knot, one of the most prominent hawks on the European Central Bank’s rate-setting committee, said it was clear that interest rates would be lower than before the crisis even after policy normalization.

This week focus will be around the major top-tier data to be released from Europe, US & UK such as CPI, ISM & Non- Farm payrolls.

27/ 03/ 2019

ECB Draghi Speech and Brexit to Drive the Market

The dollar edged higher on late Tuesday, the dollar index versus a basket of six major currencies was up, adding to modest gains made overnight. The U.S. Federal Reserve last week brought its three-year drive to tighten monetary policy to an abrupt end, abandoning projections for any interest rate hikes this year amid signs of an economic slowdown. The European Central Bank, Reserve Bank of Australia and the Bank of Japan have also taken a dovish tilt this year, while China’s central bank began loosening policy in 2018.

Looking ahead, ECB President Draghi could rain on the bulls’ parade. Central bank commentary has certainly shifted and, with the RBNZ joining the party, Draghi could deliver a EUR slide. UK parliament’s attempts to resolve the Brexit puzzle will be the main event as the markets look for a resolution to the Brexit standoff in Parliament. It’s all about the alternatives later today and, when considering the need for cross-party support, this could go on for days. It’s been reported that MPs will be completing a number of ballots that address different versions of the Brexit deal. Expect chaos during the Parliamentary session and with it, a choppy session for the Pound.