Sterling was hit by profit taking after strong gains and no overt positive Brexit developments.

Firm US data underpinned the dollar with USD/JPY strengthening to 10-week highs on Friday as defensive yen support faded.

A slight increase in Euro-zone confidence protected the Euro as German yields moved higher with EUR/USD little changed overall.

Sterling was hit by profit taking after strong gains and no overt positive Brexit developments.

Stronger than expected Chinese Caixin PMI data boosted risk appetite on Friday with global equities pushing to 4-month highs amid slightly increased confidence in the global economy.

Oil prices also gained on demand hopes with global benchmarks close to 3-month highs.

Precious metals continued to move lower amid a solid dollar tone and higher bond yields with gold at 2-week lows.

Sterling maintained a firm tone in early Europe on Thursday, although it was unable to secure further gains as pressure for profit taking increased with further selling interest above 1.3300 in GBP/USD.

A junior government minister resigned in order to campaign for the Brexit deal to be approved before March 29th and officials downplayed the potential for any meaningful vote to be held next week. There was little catalyst for fresh Sterling buying despite some evidence that opposition to the Withdrawal Agreement within the Conservative Party was fading slightly. EU chief negotiator Barnier stated that there needed to be a good reason for a Brexit delay.

Despite some support in US trading from gains in oil prices, GBP/USD dipped to lows near 1.3250 while GBP/EUR dipped from 21-month highs to trade near 1.1650. Sterling was also hampered by evidence that the US would take a tough stance in trade talks with the UK and was unable to make headway on Friday with markets wary over pre-weekend position adjustment.

Economic Calendar

07:30CHF Retail Sales (Y/Y)(JAN)--0.30%
08:30CHF SVME PMI(FEB)55.854.3
08:45Markit/ADACI Mfg PMI(FEB)47.447.8
08:50Markit Mfg PMI(FEB)51.451.4
08:55EUR German Manufacturing PMI (M/M)(FEB)47.647.6
08:55German Unemployment Change(M/M)(FEB)-5K-2K
08:55German Unemployment Rate(M/M)(FEB)5.00%5.00%
09:00Euro-Zone PMI Manufacturing(FEB)49.249.2
09:30GBP PMI Manufacturing(FEB)5252.8
09:30GBP Mortgage Approvals(JAN)63.50K63.79K
10:00Euro-Zone CPI (Y/Y)(FEB)1.50%1.40%
10:00Euro-Zone Unemployment Rate(JAN)7.90%7.90%
10:00Euro-Zone Core CPI (Y/Y)(FEB 15)1.10%1.10%
13:30USD PCE Core Price Index (Y/Y)(DEC, 2018)1.90%1.90%
13:30USD PCE Core Price Index(M/M)(DEC, 2018)0.10%0.10%
13:30USD Personal Income (M/M)(JAN)0.30%0.20%
13:30USD Personal Spending (M/M)(DEC, 2018)0.10%0.40%
13:30CAD GDP Annualized (Q/Q)-2.00%
13:30CAD GDP (M/M)(DEC, 2018)--0.10%
14:30CAD RBC Manufacturing PMI(FEB)-53
14:45USD Manufacturing PMI(FEB)-53.7
15:00US Manufacturing ISM(M/M)(FEB)5656.6
15:00USD Michigan Consumer Sentiment(FEB 08)95.695.5
17:50FOMC Member Raphael Bostic speech--
18:00USD Baker Hughes US Oil Count--

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.