President Trump confirmed that the deadline for a US-China trade deal and potential increase in tariffs would be extended beyond March 1st.

EUR/USD was held in narrow ranges on Friday with the dollar hampered by gains in commodity currencies.

In early Asia on Monday, President Trump confirmed that the deadline for a US-China trade deal and potential increase in tariffs would be extended beyond March 1st.

Chinese equities pushed sharply higher after the news, although other Asian markets were more cautious.

The dollar drifted weaker on a lack of defensive demand.

Oil prices pushed to fresh 3-month highs before being hit by profit taking while precious metals remained net headway.

The CBI retail sales index was unchanged at 0 for the latest month and slightly below consensus forecasts, although there were expectations of a strong recovery for March and there was little overall impact from domestic economic trends.

A UK official stated that a Brexit deal was unlikely in the week ahead and Sterling dipped lower ahead of the New York open.

Markets overall continued to assume that a ‘no-deal’ would be avoided through parliamentary manoeuvres with risk reversals indicating a lack of selling and Sterling regained ground later in the session.

The UK currency was also supported by stronger global risk conditions and further gains in oil prices. From lows around 1.2970, GBP/USD recovered to close around 1.3050 while EUR/GBP was little changed below 0.8700.

Prime Minister May held talks with EU officials over the weekend and there will be further dialogue on Monday. She stated that a final meaningful vote would be held by March 12th which increased speculation that Brexit would have to be delayed as speculation dominated markets. Solid global risk conditions underpinned Sterling as GBP/USD held above 1.3050, although GBP/EUR made net gains to 1.1500.

Economic Calendar

Expected Previous
13:30 USD Chicago Fed National Activity Index(JAN) - 0.27
15:00 USD Wholesale Inventories(DEC 29, 2018) 0.20% 0.30%

*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.