News & analysis
Dollar rallies as US-Sino relations ease
Yesterday saw another choppy session for GBPUSD as Theresa May stared down another question on her authority. After winning the vote of no confidence, brought up by Labour leader Jeremy Corbyn after the historic defeat of the withdrawal deal on Tuesday night, the Prime Minister took to the steps of number 10 to slander the opposition leader for not planning to attend the cross-party talks.
Record defeat for May see’s pound rally
Sterling ended yesterday’s session flat on the whole after major swings following a hammer blow for Prime Minister Theresa May’s Withdrawal Bill. The pound fell half a percentage point in the immediate aftermath against the US dollar, but then promptly rallied as May offered cross-party concessions and the likelihood of the March deadline being extended increased
Judgement day for May
Sterling flirted with a half of a percentage point rally yesterday after ITV sources claimed that the Conservative party’s eurosceptic European Research Group would side with Mrs May in today’s meaningful vote. This was short-lived, however, after minister Steve Baker confirmed that the group- a prominent opponent of May- would indeed vote against her withdrawal bill.
USD remains near three month lows after longest government shutdown in history
The US dollar bounced back on Friday from three-month lows seen on the DXY index, after a week where several downside risks became more prominent. The end of last week was characterized by more dovish remarks of Federal Open Market Committee members, among which its chair, Jerome Powell.
Fed pause all but priced in
EUR reached a 12-week high against USD yesterday during the early hours of the Asian session, only to encounter a vicious reverse in faith later which eventually prompted the single currency to tumble towards the bottom end of the G10 currency ladder.
Dovish Fed squawks lends EURUSD wings.
The euro had a bright day yesterday, as the weakness of the dollar provided a percentage point of gains to the single currency, which sat at levels not seen since last October. The 11-week high on the cross came after dovish tones from US monetary authorities, despite domestic data still offers no support to the prospects of the Eurozone.
Dollar slumps as Trump’s speech does not signal swift end of US government shutdown
Soggy sentiment surrounded sterling yesterday as no progress appears to be made in the process of getting any Brexit deal through Parliament, as the ‘meaningful vote’ of next week draws ever more near. Despite that, this morning the Great British Pound has risen itself onto a stronger footing, after 20 Tories disobeyed the party’s whip and voted along with a Labour proposal that limits the powers of the Exchequer to cut or raise taxes in case of a ‘no deal’ Brexit scenario.
FED doves continue to fly
May continues to pin her hopes on squeezing a last-minute concession out of Brussels that will be enough to convince Parliament to back her deal.
Smashing US job report and dovish Powell strap greenback in rollercoaster
Sterling spent most of the day Friday on the offensive after a positive headline on the Services Purchasing Manager Index for December at 51.2 set a positive mood. Unfortunately for sterling the entire picture is less upbeat, with the composite of the Services, Manufacturing and Construction PMI pointing towards a growth of merely 0.1% in December.
Trade wars may not be so easy to win after all – and that’s a good thing.
After taking a good old fashioned nose dive early morning during the Asian session yesterday, sterling not only pared its losses, but even managed to close above its opening level eventually. The Construction Purchasing Manager Index will be one of the last in line to claim credit for this as it came in virtually bang in line with expectations at a score of 52.8. A bounce back from the fall on Wednesday seems a more likely explanation, as there seemed to be no direct catalyst for this drop except for the Meaningful vote deadline drawing nearer with still no agreement in Parliament yet in sight. Today at 9:30 GMT arguably the UK’s most important data release for the week is scheduled with the Services PMI.
Ranko BerichRanko Berich is Head of Market Analysis at Monex Europe & Monex Canada. He is a respected macroeconomic commentator, combining incisive market insight with a deep understanding of global economic and political events.
Ranko leads our team of analysts, providing commentary and insight on the markets as news breaks.