Sterling was little changed overall in choppy trading with buying on dips as parliament defeated the government and will hold indicative Brexit votes.
A stronger German IFO reading provided some Euro protection during Monday, although EUR/USD was unable to make significant headway as both currencies struggled for support.
US benchmark yields declined further on Monday which eroded underlying dollar support, although yields secured a tentative recovery on Tuesday with USD/JPY just above 110.00.
Equity markets gained an element of support from a slightly less pessimistic stance towards global growth.
Oil prices made net headway on reduced pessimism over demand trends. Commodity currencies also secured tentative gains as global pessimism eased slightly.
Sterling was little changed overall in choppy trading with buying on dips as parliament defeated the government and will hold indicative Brexit votes.
Sterling was again subjected to very choppy trading in early Europe on Monday with a GBP/USD dip to near 1.3160. After regaining ground on increased speculation that the government would push ahead with a third meaningful vote this week, there was renewed selling early in New York. The Northern Ireland DUP stated that they had not changed their position and Prime Minister May indicated that there was still not enough support for the Withdrawal Agreement.
Lower yields were a negative factor as the benchmark 10-year rate dipped below 1.0% for the first time since September 2017. GBP/USD failed to hold above 1.3200 while GBP/EUR secured limited gains to the 1.1650 area before drifting higher.
The UK currency briefly strengthened after the House of Commons defeated the government on Brexit and will now hold indicative votes on Wednesday to find majority support for a Brexit policy which fuelled speculation over a ‘softer’ compromise.
Underlying tensions remained extremely high with three government ministers resigning and any House of Commons votes would initially be non-binding. GBP/USD again hit selling interest above 1.3200 with high volatility inevitably set to continue.
Economic Calendar
| Expected | Previous | ||
|---|---|---|---|
| 07:00 | German GfK Consumer Confidence (APR) | 10.8 | 10.7 |
| 07:45 | FOMC Harker Speech | - | - |
| 07:45 | GDP Detailed QQ | 0.30% | 0.30% |
| 09:30 | GBP BBA Mortgage Approvals | 39.4K | 40.6K |
| 10:30 | Fed President Evans Speaks | - | - |
| 11:00 | GBP BoE Ben Broadbent Speech | - | - |
| 12:30 | USD Building Permits(FEB) | - | 1.345K |
| 12:30 | USD Building Permits (M/M)(FEB) | - | 1.40% |
| 12:30 | USD Housing Starts(FEB) | 1.197M | 1.230M |
| 13:00 | US House Price Index (M/M)(JAN) | - | 0.30% |
| 14:00 | USD CB Consumer Confidence(MAR) | - | 131.4 |
| 19:00 | FOMC Member Mary Daly Speech | - | - |
| 20:00 | NZD Interest Rate Decision | - | 1.75% |