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21-Month High for the Pound

27th February 2019 Market Update

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🇬🇧 GBP – The pound leapt to its best levels in 21 months yesterday against the euro, after Theresa May offered lawmakers an opportunity to vote on delaying Brexit. Markets reacted immediately to the increasing possibility of a supposedly chaotic no-deal departure from the EU being avoided. The currency also bounced by 1.4 per cent versus the US dollar to a 5-month high.

It should be noted that investors have front-run developments consistently over the past two years and have ended up disappointed. A cautionary tone should, therefore, be adopted.
Economically, there is no data out today for the UK. A number of amendments are being voted on in Parliament later today.

🇪🇺 EUR – There is little to report from the eurozone, with losses against the pound dictated by UK developments. It should be noted that the world’s most traded currency pair, EUR/USD, has been stuck in its tightest quarterly trading range since the introduction of the euro. This highlights the acute lack of volatility in recent times in the zone.

No data is due out today.

🇺🇸 USD – The greenback fell to 3-week lows yesterday following Fed Reserve Chairman Jerome Powell repeating that the central bank would remain patient with monetary policy, indicating that interest rates are unlikely to rise in the short term. In testimony over two days of hearings, continuing today, Powell reaffirmed the shift in policy implemented in January.

The currency remains in a tight range versus the euro. There is no data due for release today.

 

Summary:
GBP: Sterling rises to long-term high.
EUR: EUR/USD, has been stuck in its tightest quarterly trading range since the introduction of the euro.
USD: US dollar falls to 3-week low in choppy trading.

 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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