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

07:45Consumer Confidence(MAR)9695
07:45Producer Prices MM(FEB)-0.10%
08:00ECB President Mario Draghi's Speech--
08:00European Central Bank Sabine Lautenschlaeger Speaks--
08:45ECB Praet Speech--
09:00Business Confidence(MAR)-101.7
09:00Consumer Confidence(MAR)-112.4
09:00CHF ZEW Expectations(MAR)--16.6
10:40German 10-y Bond Auction-0.12%
11:00USD MBA Mortgage Applications2.30%1.60%
12:30USD Trade Balance(JAN)--59.80B
12:30CAD Trade Balance(JAN)--4.59B
13:30European Central Bank Yves Mersch Speech--
14:30USD Crude Oil Inventories-2.400M-9.589M
15:00USD Current Account Balance--
21:30FOMC Member George Speaks--
23:00RBA Assistant Governor Kent Speaks--
23:50JPY Buying Foreign Bonds(FEB 06)--571.6B

*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.