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Brexit Delay Offers Sterling Limited Relief While Central Bank News Drives Rivals

Pound News: Pound Climbs as Brexit Delay to October is Agreed

Despite a Brexit delay meaning a longer period of uncertainty for the whole process and Britain’s economic outlook, investors were still relieved when the latest delay was agreed as it meant that a no-deal would be avoided, for now.

The UK and EU agreed to delay the formal Brexit date until the 31st of October. Though this didn’t do much to spook investors, it is likely to offer the Pound some relief going forward and make it easier for Sterling to gain on other news.

Recent UK data has been fairly low-influence due to the importance of Brexit developments. With the process now likely to continue for months, Pound investors will be looking ahead to how the process will develop next.

 

Euro News: European Central Bank’s Draghi Takes Cautiously Dovish Stance

Yesterday’s European Central Bank (ECB) policy decision didn’t have much in the way of surprises. As expected, the bank left monetary policy frozen and didn’t announce or signal any new monetary policy plans on the way.

However, demand for the Euro remained weak as ECB President Mario Draghi remained cautious in a press conference. Draghi acknowledge that Eurozone growth had slowed and indicated that inflation in the bloc could weaken in the coming months.

Today’s Eurozone data may give investors a better idea of whether inflation is really slowing or not, as markets will be reacting to final March inflation rate results from Germany and France.

 

US Dollar News:  Mixed US Inflation Causes Muted USD Movement

Continuing the trend of underwhelming US data causing US economic uncertainty, yesterday’s March US inflation rate data beat expectations in overall figures while the core inflation stats fell short of forecasts.

The Fed’s tone in its latest meeting minutes was largely unsurprising. The bank reiterated that it would move away from signalling more US interest rate hikes due to concerns of slower global growth, but left the door open for if the US economy remains strong.

Following last night’s Fed meeting minutes, US Dollar investors are anticipating more data and news on the economic outlook. Speeches from Fed officials this evening, or trade and Michigan confidence figures due tomorrow, will drive USD movement towards the end of the week.

 

Canadian Dollar News: Economic Concerns Cause CAD to Pull Back from Gains

Despite a rising oil price demand for the Canadian Dollar weakened yesterday. Investors sold the recently strong Canadian Dollar from its highs amid a lack of fresh strong domestic support.

Investors looking for riskier trade-correlated currencies yesterday preferred the Australian Dollar, as the Canadian Dollar’s rally that has lasted for much of the past week slowed to a stop.

This week’s last notable data will be published this afternoon, in the form of February new housing price index stats. If these beat expectations they could offer the Canadian Dollar some late-week strength.

 

Australian Dollar News: Reserve Bank of Australia’s Debelle Avoids Dovish Stance as General Election Called

During Wednesday’s Asian session, the Australian Dollar found a boost in support as Reserve Bank of Australia (RBA) Deputy Governor Guy Debelle took more of a neutral stance than a dovish one during a speech.

It bolstered hopes that Australia’s economy was showing resilience and caused RBA interest rate hike bets to lighten. AUD has also benefitted from this week’s risk-sentiment, thanks to stronger Chinese data and US-China trade hopes.

Australian Dollar investors are likely to spend today digesting this morning’s consumer inflation expectations stats, as well as last night’s Federal Reserve meeting minutes, as well as taking in the news that there will be a general election in May.

 

Upcoming Data

 

Thursday, 11th April

07:00    German Inflation Rate

07:45    French Inflation Rate

13:30    Canadian New Housing Price Index

13:30    US PPI

13:30    US Jobless Claims

 

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

Alastair Archbold

Foreign Exchange Manager

aja@fcgworld.co.uk

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