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Dollar Dominance Continues

12th February 2019 Market Update

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🇬🇧 GBP – Preliminary fourth quarter growth figures disappointed yesterday, down at 1.3%, worse than the expected fall to 1.4%. Manufacturing and industrial production figures also disappointed causing the pound to struggle to make any advances yesterday.

On the latest Brexit update, Theresa May discussed changes to the key blocks in the Brexit negotiations with former EC President Herman Van Rompuy. From the EU side, Michel Barmier suggested that the PM should endorse a permanent customs union with the single-bloc in order to break the impasse. On the wider front the UK signed a Trade Deal with Switzerland yesterday. Termed as a “Continuity Agreement” the deal maintains the status quo of the existing trading arrangement and will be used as template for other negotiations with European nations over the coming weeks. The Sun has also reported that cabinet ministers now believe that Theresa May is preparing to resign as the PM in the summer, however this report seems to have fallen on deaf ears with the markets showing very little interest in this supposed rumour.

🇺🇸 USD – In the US a deal in principle seems to have been struck over border security to avoid a new Government shutdown. While this would still need to be signed off hopes are rising for a lasting settlement this time with President Trump stating “We’re building the wall anyway!”

🇪🇺 EUR – Very little out of the eurozone yesterday with the currency still struggling to push on following the EU’s GDP downgrades last week

 

Summary:
GBP: Data disappoints ahead of Mark Carney’s Speech today.
USD: The dollar continued to strengthen, now at its strongest level since December.
EUR: Poor growth outlook continues to cloud the euro.

 

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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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