UK Pound Gathering Strength Under Brexit Hopes

Pound Stands Strong Albeit A Possibility of No-Deal Brexit

Sterling rose by 0.7% against the USD Index albeit UK Prime Minister Theresa May was defeated in the House by 149 votes losing Majority. This was the second consecutive time, Theresa May faced rejection from the Parliament for a deal Brexit. There had been a strong hope developed among the investors which helped the Pound and Euro reach new heights.  

Shahab Jalinoos, global head of foreign exchange strategy at Credit Suisse commented that “The outcome yesterday of the vote was more or less what the market expected despite the actual drama of the politics. Now we have to wait and see what comes next. There are so many permutations and combinations available at this point that it has left the market on hold”.

Sterling Pound was hovering at its higher values offsetting by 3.5 cents against the USD. GBP/USD chased more upward movement with the EU rejecting May’s deal vis-a-vis Brexit.  

Even Positive Durable Goods Order Numbers Couldn’t Help Tumbling USD  

USD Index in comparison with the six major currencies was measured lower by 0.21% reaching $96.70. Last month, around 20,000 jobs were added in the US. Producer Prices for February were merely above the previous numbers. A day before, the Consumer Price Index had also improved on marginal levels. This inflation data bolstered the lower chances of a nearby hike in the US interest rates. Though the Orders for Durable goods recorded the highest growth in the six months in January, this was inadequate to alter the losing outlook for the US economy in 1H2019. USD/CAD continued to downfall even with the 0.34% upliftment in the US Durable Goods Orders. EUR/USD remained steady at 1.1298 recovering its previous losses.    

GBP/JPY Remained Buoyed With Uplifted Brexit Hopes

GBPJPY 5 Min 13 March 2019
GBPJPY 5 Min 13 March 2019

Japanese Yen again manages to stay consistent at 111.36 JPY/USD. Japanese Core Machinery Orders slipped by 5.4% which was recorded as the steepest fall in the last four months. GBP/JPY pair stayed afloat amid strong Pound weighed by Brexit hopes and weaker Japanese Machinery data. This pair is on the road of recovering the last week losses.     

Euro Climbs Heights With Positive Economic Data

Eurozone industrial production was higher than the overall market expectation for the first month of 2019. Following the release of such good numbers, Euro surged by 0.1% reaching a peak of $1.1302. Eurozone budget was announced which aimed at providing loans to nations within the zone. This was implemented with an aim to give an impetus to the country’s liquidity outright.

EURUSD 1 Min 13 March 2019
EURUSD 1 Min 13 March 2019

AUD Hovers Near Two-Month Low

Australian dollar slumped as consumer confidence was recorded as the lowest in this month. Over the last week, the economy has been in a downtrend after the Reserve Bank of Australia could not accomplish as per the guidance provided by the bank for an interest rate hike. This event triggered a profound weakness in the country’s economy. AUD was down by 0.5% reaching $0.70495 which was merely $0.0049 above the two month low.

NZD/USD Pair Bounces Off In the Second Half

NZDUSD 5 Min 13 March 2019
NZDUSD 5 Min 13 March 2019

NZD/USD pair saw a three-day consecutive winning streak. The pair experienced bearish pressure since the morning. The NZD/USD pair touched the intraday low of 0.6830 before bouncing back strongly. The pair reached the intraday high of 0.6858. The tumbling USD Index helped the pair recovery in the second half of the day.

World eyeballs over to the Second Meaningful Vote

Dollar Slip Bolsters Over An Unsure Brexit Deal

USD Index continued to fall since the start of the day amidst unstable concerns pertaining to Brexit case, Global Trade issues and a high US Consumer Price Index (CPI) number.

US Consumer Price Index for February Month
US Consumer Price Index for February Month

The DUP Party of Northern Ireland displayed a dis-support for a deal Brexit earlier the day after Cox’s legal advice. They explicitly mentioned that a deal Brexit would be jeopardized. Theresa comments later that there won’t be a Brexit if the deal is getting rejected. These had added deep uncertainty to the US Index.

Almost after the last four months, US CPI surged in the month of February. US CPI was up by 0.2% for February. This increase is the lowest annual gain in the last 2.5 years. USD slumped then by 0.17% reaching 97.054. The Core CPI reported a lower 2.1% annual rate which further led to the decrease in USD index.

The Index uplifted slightly by the end of the day with a confident hope developed over a Brexit deal when the news broke regarding May coming into legally binding assurances from EU. The Market awaits the Second Meaningful Vote which is scheduled to be at around 1900 GMT.

Burgeoning Sterling Ahead of Parliamentary Vote

After pretty much fluctuations throughout the day, Sterling seems back to the same point where it was the last day albeit touching a new 22-month best against the Euro counterpart. Sterling gained over the period following optimism of a deal Brexit. The Currency also got marked as the Best Performer of 2019 considering the retrospective uplift.

GBP/USD lowered later the day on various Brexit headlines. The pair fell around by 200-pips. The pair went down further after Cox commented that “The Interpretive document offered by the EU would grant no legally guaranteed right to exit the Irish Backstop in the event of a deal deadlock.” This bearish stance seemed to recover soon with positive outcomes of the Prime Minister’s Cabinet Meeting, and the pair then gained around 90-pips.

Yen Continues To Be Silent

USDJPY 1 Min 12 March 2019
USDJPY 1 Min 12 March 2019

Japanese Manufacturing fourth quarter data reported a decline of 7.3 points in the country’s BSI Manufacturing Index. The USD/JPY pair is trading at around 111.14, merely down by 0.06%. The pair seems undisturbed albeit US CPI release. Japan reported Core Machinery Orders and PPI by the end of the day.

US Inflation Data Boosting AUD/USD

AUDUSD 5 Min 12 March 2019
AUDUSD 5 Min 12 March 2019

The AUD/USD pair experienced a decent rally on Monday’s trading session. The pair managed to continue its rally with gains in Tuesday’s trading session. The AUD/USD pair saw selling pressure in the beginning. The pair touched low of 0.7054 before bouncing back strongly. It has reached the intraday high of 0.7090.

Australian Housing data reported today was not-so-good. The Australian Bureau of Statistics released the housing data that revealed the home loans were lower than the overall market expectation. The January home loans data was down by 2.6% before December data.

US Dollar Index was hovering at a peak level of 97.28 before the Inflation data release. US Inflation data helped the AUD/USD pair to shoot up in the later session of the day.

Pound Bouncing Strongly Before Tuesday’s Voting

Pound Rallied Up On An Optimistic Note

GBPUSD skyrocketed to a new day’s high of 1.3161. Sterling went up after German Chancellor Angela Merkel disclosed some important deal-making news about Brexit.

USDCNY Chart 11 March 2019
30 Min GBPUSD Chart 11 March 2019

The news came out that the EU had come into “a highly significant” deal with the UK fostering a deal Brexit. It remains crucial to observe whether the current jump will be sustained by GBPUSD. The pair has seen 7 days consecutive downfall. GBPUSD will be highly affected by the Tuesday’s Second Meaningful Vote update.

Earlier today, Sterling slumped by more than 0.1% to $1.2998 hovering near a three-week low over Brexit jitters. This fall had worsened after British Foreign Minister, Jeremy Hunt alerted on Sunday that the Brexit deal could be reversed if the lawmakers rejected the deal. UK PM Theresa May’s Brexit deal getting rejected on Tuesday will throw the Pound further down. Pound had already made it to seven consecutive falls.

On Tuesday, Theresa May will be trying all possible ways to get support in the Parliament.

Wild Swing in EURGBP Pair

EURGBP 11 March 2019
15 Min EURGBP 11 March 2019

EURGBP saw a wild movement in the pair. The EURGBP traded in positive territory and crossed its 2-week high price by touching 0.8675. With a strong move in GBP, the EURGBP pair seen a bearish pressure. It is now in consolidation mode and trading at 0.8545. The pair is trading at a crucial support level of 0.8536

Dollar Index At Its Three-Month High

US Dollar index weighing against the basket of major currencies gained %.
US Retail sales report pushed the index upside. Core Retail Sales soared with a gain of 0.9% from the last month sales of -1.8% and Retail Sales reported 0.2% compared to previous month sales of -1.2%.

US Retail Sales March 2019
“After the ECB’s big downgrade of the growth outlook for the euro area, together with the weaker-than-expected Chinese export and import data, the worry over the global economy is re-surging again. That’s pushing down the euro and other currencies. The U.S. is not particularly strong, but other areas are weak. That’s why the dollar is relatively strong.” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

Japan’s Yen Boomerangs

The dollar remained consistently for a quite while around 111 yen level on Monday morning before the release of US Sales report. USDJPY touched low as well as high during the day.

Chinese Yuan Under Worries On Low Export Number

USDCNY Chart 11 March 2019
60 Min USDCNY Chart 11 March 2019

China’s Yuan lowered by the end of the day following the release of the country’s February Exports Reports which were down by more than 21%. USD/CNY pair remained sustained near 6.7220.

China being the World’s second-largest Economy to get hit with low exports, this will also significantly impact the Overall World Economy. The primary reason for the decrease in exports was the US tariffs on Chinese imports.

As per recent news, US-China Trade Talks is aligning on a positive note. Larry Kudlow, Director of US Economic Council, said in a recent talk that they are making good progress in signing a great deal with China. The US is highly optimistic at this point. The team is working on the last aspects of the agreement and will soon ink the pact.

Canadian Dollar Traded Slightly Positive

Canadian Dollar remained higher than the USD majorly because of the spike in oil prices. Prolonged OPEC-led Oil Supply cut and lower US Crude Oil helped the Major Oil Exporter (Canada) benefit from the rising oil demand.

Earlier the day, the currency had moved upward following the announcement of the rebounded US retail sales. There had been no significant event about Canada this week (after last Friday). Hence the rise can be supposedly due to the hike in oil prices and subdued US Retail Sales.