19/ 03/ 2019

Theresa May gets turned down 3rd time & Dollar hits 2-week low before Fed Meeting

The dollar was on the defensive on today, weighed by growing expectations the Federal Reserve would adopt a more accommodative policy outlook this week and concerns about slower U.S. economic growth. Sterling also gained, rising almost one-fifth of a percent against Dollar. It had seesawed overnight after the speaker of Britain’s parliament said Prime Minister Theresa May’s Brexit deal could not be voted on again unless a different proposal was submitted. The Bank of England is expected to leave its interest rate outlook unchanged at a policy meeting on Thursday due to the deep uncertainty over Britain’s decision to leave the European Union.

Many investors expect the Fed to keep its benchmark overnight interest rate unchanged and stick to its pledge of a “patient” approach to monetary policy. “If the Fed really shows a gloomy outlook for growth and rates, then it’s also a negative for U.S. equities. Then that will be a negative for the dollar” stated by a Group of Markets Strategists and this also means the rival currencies like Euro & GBP could surge higher than the Dollar.

Looking ahead, focus remains on Brexit and “the deal.”

17/ 03/ 2019

Week Ahead | FX Market Drives on Anticipation of US Fed Interest Rate Hikes & Brexit Votes

The British pound rose on Friday, posting its best week since January, as Prime Minister Theresa May tried to convince Euroscepticism to back her deal to exit the European Union in a third parliamentary vote next week. It ended last week as the strongest one as no-deal Brexit is now politically ruled out. But it should be noted that the path forward remains unclear, as least for a few more days. Thus, the upside breakout of Sterling was indecisive. The Pound has indeed closed below recent highs against Dollar and Yen. On the other hand, Euro ended as the second strongest while Yen was the weakest, followed by Dollar. Overall, as the key issues in Brexit and US-China trade negotiations are unresolved, traders hesitated to commit to a firm direction.

Three central banks will meet this week, including Fed, SNB and BoE. All are expected to keep monetary policies unchanged. SNB and BoE are unlikely to provide any fresh inspirations to the market. Fed’s new economic projections, however, will finally tell us, in terms of numbers rather than words, what made Fed change to a “patient” stance this year with major statistics from Europe & UK markets.

14/ 03/ 2019

Intense Volatility Continues as US, China & Brexit Drives the Flow

Sterling spiked higher overnight after UK Commons voted to reject no-deal Brexit. But there was no follow through buying as the Pound settles back into familiar range quickly. It’s indeed the weakest one for today so far, paring some of the gains. Focus will now turn to vote on Article 50 extension today. UK lawmakers finally have a chance to tell the world what they want, rather than what they don’t want. Following Sterling is the second weakest as weighed down by Chinese data, which suggest the slowdown could last longer. On the other hand, Dollar and Euro and the strongest ones for today.

Looking ahead, with the economic calendar likely to be of little influence, market risk sentiment will remain the key driver. Updates on trade talks between the U.S and China and Brexit will be in focus through the day.It’s a 3rd Brexit vote of the week and this could ultimately decide whether Britain leaves the EU with or without a deal.

13/ 03/ 2019

Brexit Game Plan Targets Sterling Range

The euro strengthened against the U.S. dollar on Tuesday, after U.S. consumer prices showed that inflation remains low despite a tight labor market, encouraging the Federal Reserve's case for keeping interest rates on hold. On the other hand, sterling declined against the dollar yesterday, after Theresa May's Brexit plan failed to win a confidence vote in parliament. The British Parliament rejected May's deal to quit the European Union for a second time, deepening the country's worst political crisis for generations, 17 days before the planned departure date.

Pound is trading as the weakest one yesterday, despite strong January GDP data. Canadian Dollar follows as the second weakest. Dollar got not support from CPI inflation data, which slowed in February. The greenback is the third weakest, followed by Euro.

While the economic calendar was on the lighter side, all eyes will be on the Parliament today with the question that remains is whether the very same members of parliament will plunge Britain into the abyss later today. A free vote is to take place later to decide on whether Britain will leave the EU without a deal. The vote comes ahead of an anticipated Thursday vote on whether to extend the 29th March deadline. If today’s vote goes against, there will be no vote on Thursday and the Pound will pay the price.