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Brexit Uncertainty Pressures Sterling while Australian Growth Stats Send AUD Plunging

Pound News: Major Brexit Developments Cause Sharp Sterling Volatility

Sterling saw major fluctuations throughout yesterday’s session, as domestic sentiment over the latest changes to the UK government’s negotiated Brexit deal shifted significantly throughout the day.

Sterling briefly surged on hopes for stronger support for the deal, but when MPs decided the deal had not considerably changed since the previous vote perceived support faded and Sterling slumped. The meaningful Parliament vote ended with the government deal being blocked once again.

Investors will continue to digest yesterday’s Brexit news today and the Pound is likely to remain intensely volatile. With the UK Parliament expected to vote to block a no-deal Brexit today, a strong vote against this outcome could offer the Pound some fresh support.

 

Euro News: Weakness in Rivals and Eurozone Economic Hopes Bolster Euro Strength

There was no notable Eurozone data yesterday, leaving the shared currency to continue to be driven by the strength of rival currencies like the Pound and US Dollar. As the Euro is the US Dollar’s biggest currency rival, the two currencies often see a negative correlation.

Demand for the Euro has also been supported by market speculation that the Eurozone economic outlook could be about to take a turn for the positive, as well as speculation that the Euro will soon recover from its recent lows.

Some of this week’s more influential Eurozone data will be published today, in the form of January’s Eurozone industrial production stats. If these beat expectations they could offer the Euro some more solid support.

 

US Dollar News: US Dollar Demand Limited by Signs of Slowdown in US Economy

The Pound avoided deeper losses against the US Dollar yesterday, as US data continued to indicate that the US economy is showing signs of having been hit by the global economic slowdown. It follows last week’s poor US Non-Farm Payroll figure and Monday’s weak revised December retail stats.

The focus for US Dollar investors today was February’s US inflation rate results, which fell short of expectations in every major print. The yearly inflation figure unexpectedly slowed from 1.6% to 1.5%.

Today’s US data includes durable goods orders stats from January, which could put further pressure on the US Dollar if they disappoint investors.

 

Canadian Dollar News: Stronger Oil Prices Fail to Support ‘Loonie’

Prices of oil, Canada’s most lucrative commodity, failed to give investors sufficient reason to buy the Canadian Dollar despite the commodity’s climbs in recent sessions. Oil prices have been stronger due to signs of further voluntary production cuts among major oil producers.

The Canadian Dollar struggled to keep climbing as investors sold it from its highs versus major rivals like the US Dollar. Its strength has also been limited by a lack of strong Canadian data in recent sessions.

Today is set to be another quiet one for the Canadian economic calendar. Brexit news will drive GBP/CAD movement while CAD investors await shifts in market risk-sentiment or tomorrow’s Canadian new housing price stats.

 

Australian Dollar News: ‘Aussie’ Rebounds Strongly from Lows

Despite a lack of strong supportive Australian data in recent sessions, investors found the Australian Dollar more appealing yesterday as they opted to buy the relatively risky trade-correlated currency back from its lowest levels.

Investors bought the Australian Dollar back while it was cheap, helping it to extend its gains versus a weak Pound. Weakness in the US Dollar amid poor US data has also bolstered demand for riskier currencies and helped to support the Australian Dollar.

Australian Dollar investors will continue to digest this morning’s Australian consumer confidence data from Westpac today. Shifts in market risk-sentiment could also influence the ‘Aussie’.

 

Upcoming Data

 

Friday, 15th March

07:00    German Wholesale Prices

10:00    Eurozone Inflation Rate

12:30    Canadian Manufacturing Sales

13:15    US Manufacturing and Industrial Production

14:00    US Michigan Consumer Sentiment

 

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

 

James Spurway

Director Sales and Dealing

jas@fcgworld.co.uk

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