Sterling volatility remained high with net support on dips given some speculation that the Withdrawal Agreement could still be approved.
US data was generally below consensus forecasts with a dip in consumer confidence and US 10-year yields held close to 15-month lows.
The dollar still made net gains as the Euro lost traction once again on growth fears with EUR/USD at 2-week lows.
Dovish Reserve Bank of New Zealand forward guidance also reinforced expectations that global central banks would adopt dovish policies which protected the US dollar.
US equity markets made significant net gains on firmer risk conditions. Oil prices made net gains on firmer risk conditions and underlying supply concerns. Precious metals were hampered by a firm US dollar tone.
Sterling volatility remained high with net support on dips given some speculation that the Withdrawal Agreement could still be approved.
UK February mortgage approvals declined to 35,300 from a revised 39,600 the previous month and well below consensus forecasts which triggered fresh doubts over the housing sector, but gains in oil prices provided net currency support.
Sterling gained ground ahead of the New York open with fresh speculation that Conservative MPs within the ERG group, notably Rees-Mogg were starting to shift towards supporting the government’s Withdrawal Agreement. There was also speculation that Prime Minister May would announce a date for her resignation to boost support for the deal.
Choppy trading continued with the UK currency retreating again after some reports that the DUP were ready to accept a long Brexit extension rather than accept the current deal. Choppy trading persisted and EUR/GBP held around 1.1700 while GBP/USD retreated to near 1.3200 from a peak above 1.3250.
Dollar gains dominated on Wednesday with GBP/USD around 1.3180 with the Euro on the defensive and below 0.8550. UK political developments will continue to be watched closely with the House of Commons due to hold indicative votes while Prime Minister May will hold an important meeting with Conservative Party backbench MPs.
Economic Calendar
| Expected | Previous | ||
|---|---|---|---|
| 07:45 | Consumer Confidence(MAR) | 96 | 95 |
| 07:45 | Producer Prices MM(FEB) | - | 0.10% |
| 08:00 | ECB President Mario Draghi's Speech | - | - |
| 08:00 | European Central Bank Sabine Lautenschlaeger Speaks | - | - |
| 08:45 | ECB Praet Speech | - | - |
| 09:00 | Business Confidence(MAR) | - | 101.7 |
| 09:00 | Consumer Confidence(MAR) | - | 112.4 |
| 09:00 | CHF ZEW Expectations(MAR) | - | -16.6 |
| 10:40 | German 10-y Bond Auction | - | 0.12% |
| 11:00 | USD MBA Mortgage Applications | 2.30% | 1.60% |
| 12:30 | USD Trade Balance(JAN) | - | -59.80B |
| 12:30 | CAD Trade Balance(JAN) | - | -4.59B |
| 13:30 | European Central Bank Yves Mersch Speech | - | - |
| 14:30 | USD Crude Oil Inventories | -2.400M | -9.589M |
| 15:00 | USD Current Account Balance | - | - |
| 21:30 | FOMC Member George Speaks | - | - |
| 23:00 | RBA Assistant Governor Kent Speaks | - | - |
| 23:50 | JPY Buying Foreign Bonds(FEB 06) | - | -571.6B |