The Euro and Sterling were undermined by political concerns.

US data was stronger than expected with a drop in jobless claims and a firm reading for the Philadelphia Fed index.

Firm data boosted dollar confidence and the US currency continued to gain net support from vulnerability and a lack of confidence in other major currencies.

The Euro and Sterling were undermined by political concerns and low yields with rate-cut speculation undermining the Australian dollar and the yen lost defensive support.

US and European equities made solid gains, but Chinese equities lost ground as underlying US-China trade fears persisted.

Oil prices were again supported by Middle East tensions and supply concerns, but precious metals declined, and silver declined sharply to fresh 2019 lows.

Political factors continued to undermine Sterling on Thursday with a lack of positive factors. There was no evidence of increased House of Commons support for the early-June Withdrawal Act vote. Following Prime Minister May’s meeting with the 1922 committee executive, there was agreement that a resignation timetable would be announced after the Brexit vote.

Sources suggested that a leadership contest during the summer was inevitable regardless of whether the legislation was approved and rejection of the Bill in early June would be likely to trigger an immediate resignation. There were also strong expectations that talks between the government and Labour Party were set to end with no agreement on Friday.

Concerns over instability and a lack of deal continued to undermine Sterling with a GBP/USD retreat to fresh 3-month lows below 1.2800 as GBP/EUR fell below 1.1450. The UK currency was unable to recover ground even with gains in equity markets and higher oil prices with Sterling remaining under pressure on Friday as GBP/USD remained below 1.2800.

Economic Calendar