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Brexit Delay Fails to Inspire Pound Investors as Rivals Digest Central Bank News

Pound News: Brexit October Delay Leaves Pound Limp

On Wednesday night, the UK finally secured a second delay to the formal Brexit date from the EU. Britain is now set to leave the EU on the 31st of October, unless an agreement is reached before then which would allow Brexit to occur earlier.

Demand for the Pound was actually a little weaker yesterday despite relief that a no-deal Brexit would not happen just yet. Throughout the day, analysts noted that a delay also meant more months of economic uncertainties for businesses and consumers.

No notable UK data will be published today, so the Pound is likely to remain sensitive to Brexit speculation as investors await jobs data and other potential Brexit developments next week.

 

Euro News: Euro Mixed Following Unsurprising Inflation Results

Despite the European Central Bank’s (ECB) relatively cautious tone in its policy decision on Wednesday, and a lack of strong Eurozone data in recent sessions, the shared currency has been able to hold its ground versus weaker rivals.

Yesterday’s German and French Consumer Price Index (CPI) inflation figures from March largely met expectations, but concerns remain. The Euro was only able to hold its ground yesterday due to a weak Pound and a shaky US Dollar.

German wholesale prices and Eurozone industrial production results will be published today and could cause some late-week Euro movement as investors anticipate next week’s Eurozone economic sentiment data from ZEW.

 

US Dollar News: Federal Reserve Dovishness Weighs on USD

On Wednesday night, the US Dollar weakened as investors reacted to the Federal Reserve’s latest meeting minutes report – which was perceived as dovish.

While generally unsurprising, the report reiterated that the bank was unlikely to hike US interest rates again this year due to concerns of slowing global growth, firming the more dovish tone the bank took in its last meeting. This led to US Dollar weakness, and while the currency’s demand improved a little yesterday afternoon it still trended lower versus the Pound and Euro this week.

US Dollar investors may react to Michigan University’s April confidence projections, due out this afternoon. Aside from that though, US Dollar investors will be anticipating next week’s US factory and trade data.

 

Canadian Dollar News: CAD Falls Back from Latest Rally

The Pound to Canadian Dollar exchange rate has recovered this week’s losses, as the rally that the Canadian Dollar has seen since the end of last week petered out amid a lack of fresh support and new market risk-aversion.

Oil weakened from its recent highs which pressured CAD trade. On top of this, global economic slowdown fears and some underwhelming Canadian housing price stats yesterday further weighed on the risky trade-correlated Canadian Dollar.

No notable Canadian data will be published today, leaving the Canadian Dollar to be influenced by risk-sentiment towards the week as investors await next week’s manufacturing and inflation results.

 

Australian Dollar News: AUD Resilience Slips as Risk-Aversion Returns

Investors sold the Australian Dollar from its recent highs yesterday, following days of resilient strength amid risk-sentiment and falling Reserve Bank of Australia (RBA) interest rate hike bets.

The Australian Dollar was weaker as investors became more risk-averse, as well as weaker consumer inflation expectations data and other indications that inflation was likely to have slowed last quarter. Despite this, the Australian Dollar saw stronger support than other risk-sensitive currencies like the Canadian Dollar.

Australian Dollar investors will be reacting to any surprising points from the Reserve Bank of Australia’s latest financial stability review report today, as well as anticipating the bank’s latest meeting minutes on Tuesday.

Upcoming Data

 

Friday, 12th April

02:30    RBA Financial Stability Review

07:00    German Wholesale Prices

10:00    Eurozone Industrial Production

13:30    US Import and Export Prices

15:00    US Michigan University Confidence Projections

 

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To keep up to date with the Euro, visit the Euro blog in our Currency News section.

 

Michael Vaughan

Senior Currency Broker

mgv@fcgworld.co.uk

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