Sterling dipped after three Conservative MPs resigned to join the Independent group.

Federal Reserve minutes were relatively dovish with a suggestion that the balance sheet reduction would come to an end later this year.

The dollar had already weakened into the release and secured some relief on short covering as rallies in the Euro and Sterling attracted selling interest.

Global equities posted fresh 4-month highs with hopes that the US and China would be able to secure a trade deal.

Oil prices advanced to fresh 3-month highs on hopes for market rebalancing while precious metals corrected lower.

After initial gains on strong jobs data, the Australian dollar declined sharply on fresh speculation over interest rate cuts and commodity currencies overall lost traction.

Cryptocurrencies secured further net gains, although bitcoin hit resistance at key levels.

The CBI reported that manufacturing activity had weakened in the three months to February, although there was an improvement in order books to 6 from -1 the previous month as the exports component also strengthened slightly.

Sterling dipped after three Conservative MPs resigned to join the Independent group. This will reduce the government’s notional majority and increase instability, although there was a high degree of uncertainty and potentially mixed implications for the Brexit process. Sterling overall dipped with GBP/USD near 1.3010 on increased speculation over a General election.

Talks between Prime Minister May and EU Commission President Juncker were described as constructive with a further discussion of guarantees to offer reassurance over the backstop. Speculation over progress and higher oil prices boosted Sterling with GBP/USD highs near 1.3100. There was, however, no evidence of a Brexit breakthrough ahead of key parliamentary votes next week and GBP/USD corrected to below 1.3050 amid intense political uncertainty. GBP/EUR was held around 1.1500, although it rallied from intra-day lows.

Economic Calendar

07:00Germany CPI (Y/Y)(JAN)1.40%1.40%
07:00Germany CPI (M/M)(JAN)-0.80%-0.80%
07:00Germany Harmonised CPI (M/M)(JAN)-1.00%-1.00%
07:00Germany Harmonised CPI (Y/Y)(JAN)1.70%1.70%
08:00ECB Praet Speech--
08:15Markit Mfg PMI(FEB)51.251.2
08:15Markit Serv PMI(FEB)49.247.8
08:30EUR German PMI Services(FEB)52.853
08:30EUR German PMI Composite(FEB)5252.1
08:30EUR German Manufacturing PMI (M/M)(FEB)49.849.7
09:00Euro-Zone PMI Manufacturing(FEB)50.350.5
09:00Euro-Zone PMI Composite(FEB)50.851
09:00Euro-Zone PMI Services(FEB)51.451.2
09:00GBP Public Sector Net Borrowing(JAN)-11.05B2.11B
10:00CPI (EU Norm) Final YY*(JAN)0.90%0.90%
10:00CPI (EU Norm) Final MM*(JAN)-1.70%-1.70%
12:30ECB Monetary Policy Meeting Accounts--
12:50FOMC Member Raphael Bostic speech--
13:30USD Philadelphia Fed. Manufacturing Index(FEB)1517
13:30CAD Wholesale Sales (M/M)(DEC, 2018)--1.00%
13:30USD Durable Goods Orders (M/M)(DEC, 2018)1.70%0.70%
13:30USD Durable Goods Orders Ex Transportation(DEC, 2018)0.20%-0.40%
14:45USD Manufacturing PMI(FEB)54.754.9
14:45USD Markit Services PMI(FEB)54.254.2
14:45USD Markit PMI Composite(FEB)-54.4
15:00USD Existing Home Sales(JAN)5.03M4.99M
15:00USD Existing Home Sales Change(JAN)0.90%-6.40%
15:30USD Crude Oil Inventories-3.633M
17:35BoC Gov Poloz Speaks--
22:30RBA Assistant Gov Lowe Speaks--
23:30JPY National CPI Ex-Fresh Food (Y/Y)(JAN)0.80%0.70%
23:30JPY National CPI (Y/Y)(JAN)-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.