Pound News: Pound Firms on Fresh Hopes that No-Deal Brexit Will Be Avoided
Despite a lack of direction in the Brexit process, the Pound firmed and was able to avoid losses yesterday thanks to fresh news bolstering hopes that a no-deal Brexit could be prevented, and that a general election was becoming less likely.
UK Parliament voted in favour of a major bill to avoid a no-deal Brexit by just one vote. This bill, unlike other Parliament votes, is designed to be enforced by law if it is able to pass the House of Lords. On top of this, Prime Minister Theresa May and opposition leader Jeremy Corbyn are expected to hold further meetings after Brexit compromise talks described as ‘constructive’.
With the EU indicating that the UK has until next Friday to decide between a long-extension or a no-deal, Brexit developments such as the possibility of a cross-party agreement will remain the core focus of Pound movement.
Euro News: Eurozone Services PMI Rebounds More than Expected
At the beginning of the week, signs of an even weaker than expected Eurozone manufacturing sector weighed heavily on the Euro, but yesterday the shared currency saw a jump in demand as other parts of the Eurozone economy outperformed expectations.
The Eurozone’s March services PMIs, from Markit, beat expectations in most key prints. On top of this, Eurozone retail sales performed twice as well as expected in February. These figures bolstered hopes for Eurozone economic resilience and supported the Euro.
Most of this week’s influential Eurozone data has been published now, but reaction to today’s German factory and construction stats could drive Euro movement as investors await tomorrow’s key German industrial production figures.
US Dollar News: Risk Sentiment and Euro Strength Keep Pressure on USD
The US Dollar was among the weaker major currencies yesterday. As the US Dollar is a safe haven currency and has a negative correlation to the Euro’s strength, the latest rise in risk-sentiment and the Euro’s strength left the US Dollar relatively unappealing.
Demand for the US Dollar was little changed following yesterday evening’s US non-manufacturing PMI data from ISM, which fell short of expectations but still printed at a generally strong figure of 56.1.
Not as much influential US data will be published today, but US jobless claims and any fresh comments from Federal Reserve officials could drive US Dollar movement as investors await tomorrow’s Non-Farm Payroll report.
Canadian Dollar News: US-China Trade Hopes Limit CAD Losses
Yesterday, the US and China resumed long-running trade negotiations, and analysts are becoming even more hopeful that a deal on trade between the nations is increasingly within reach. One US official said that the US and China were about 90% of the way towards a deal.
As the Canadian Dollar is a relatively risk-sensitive currency, this helped it to avoid deeper losses versus the Pound yesterday. However, the Canadian Dollar’s bullish streak on last week’s Canadian growth data appears to have run its course.
Some relatively influential Canadian Ivey PMI data, as well as continued developments in US-China trade negotiations and overall risk-sentiment, are likely to drive the Canadian Dollar today.
Australian Dollar News: ‘Aussie’ Climbs as Australian Data Douses RBA Interest Rate Cut Bets
The Australian Dollar had been weaker for much of the past week due to concerns that the Reserve Bank of Australia (RBA) could be preparing to cut Australian interest rates in the foreseeable future.
As a result, the Australian Dollar saw a solid rebound in demand yesterday as Australia’s latest trade balance and retail sales results came in well above expectations and bolstered hopes that the RBA would not have much reason to cut Australian interest rates any time soon.
No notable Australian data will be published today, so Australian Dollar investors will be reacting to US-China trade developments and shifts in risk-sentiment as they anticipate tomorrow’s Australian construction PMI stats.
Thursday, 4th April
07:00 German Factory Orders
08:30 German Construction PMI
12:30 ECB Monetary Policy Meeting Accounts
13:30 US Jobless Claims
15:00 Canadian Ivey PMI
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Director Sales and Dealing