Sterling volatility declined even though political tensions remained intense.

The dollar was held in tight ranges with a slight drift lower on Friday to reverse Thursday’s gains. Hopes that global demand would recover later this year curbed US demand.

The Bank of Japan made no changes to monetary policy but downgraded the economic outlook.

Sterling volatility declined even though political tensions remained intense with net losses as the House of Commons did not back another referendum.

Crude was resilient on supply concerns and WTI posted 4-month highs on Friday as risk appetite held firm and commodity currencies also made net gains.

Equity markets secured limited gains in Asia on Friday. Precious metals recovered ground as the US dollar drifted lower.

Bank of England MPC member Haskel stated that he would want to see evidence of higher inflation before voting to raise interest rates and he also expressed concerns over the risks to labour-market strength. The rhetoric was dovish, although the overall market impact was very limited as political developments inevitably dominated.

There was some speculation that the Northern Ireland DUP were edging towards a deal with the government to support the Brexit Agreement which underpinned Sterling, although there was very choppy trading and no announcement of progress.

House of Commons tensions remained extreme, although there was an element of stabilisation as the government avoided defeat on an amendment that would have seen parliament take control of the Brexit procedures. The government will apply for a short Article 50 extension if agreement is in place by March 20th and a longer extension if there is no agreement.

With an amendment calling for a second referendum defeated, Sterling registered net losses with a GBP/USD retreat to below 1.3250 while GBP/EUR held around 1.1700. Sterling was little changed on Friday as efforts to secure support for the Brexit deal continued with position adjustment liable to contribute to further volatile trading during the day.

Economic Calendar

10:00Consumer Price Prelim MM(FEB)0.20%0.20%
10:00Consumer Price Prelim YY(FEB)1.10%1.10%
10:00CPI (EU Norm) Prelim MM(FEB)-0.20%-0.20%
10:00CPI (EU Norm) Prelim YY(FEB)1.20%1.20%
10:00Euro-Zone Core CPI (Y/Y)(FEB 22)1.00%1.00%
10:00Euro-Zone CPI (M/M)(FEB)0.30%-1.00%
10:00Euro-Zone CPI (Y/Y)(FEB)1.40%1.50%
12:30NY Empire State Manufacturing Index(MAR)10.18.8
12:30CAD Manufacturing Shipments (M/M)(JAN)0.40%-1.30%
13:15USD Industrial Production(FEB)0.40%-0.60%
13:15USD Capacity Utilization(FEB)-78.20%
14:00USD JOLTs Job Openings(JAN)7.310M7.335M
14:00USD Michigan Consumer Sentiment(MAR 15)95.393.8
17:00USD Baker Hughes US Oil Count-834
20:00USD TIC Net Long-Term(JAN)--48.3B
21:30NZD Business NZ PMI(FEB)-53.1

*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.