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EUR Pessimistic that a Brexit deal could be reached.

7th March 2019 Market Update

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🇬🇧 GBP – Sterling started the day on the backfoot after the OECD warned that a no deal Brexit could mean a recession for the UK. They now expect the UK will grow by 0.8% this year, down from 1.4% in 2018. On top of this Sir Jon Cunliffe, deputy governor of the BoE, warned that a disorderly Brexit would pose a big threat to the financial stability for the UK.

However mood on the pound turned by the afternoon as report suggested that Brexiteers are seriously considering a long article 50 extension. As we saw last week, any mention of an extension to article 50 will have supporting tendencies for the pound, with the currency remaining near its multi-month highs.

No data out today.

🇪🇺 EUR – European officials have weighed in on Brexit suggesting that they are pessimistic about a deal being brokered before next weeks vote in parliament. Other than that, very little data out yesterday but today could prove to be more interesting.

Aside from the interest rate decision at 12.45pm, markets attentions will be on the Mario Draghi’s speech at 1.30pm. Analysts expect Draghi to announce a downgrade on growth and inflation forecasts to justify a new round of long-term loans for bank in the EU. Growth figures for the fourth quarter are also expected to come in as expected at 1.2%.

🇺🇸 USD – ADP job figures disappointed yesterday and in blow to Donald Trump, the US trade deficit widened to its highest level since 2018. The gap between imports and exports soared to US$621bn in 2018, up from US$552.3bn in 2017; showing that the Presidents trade policies aren’t working.

No data out today but the all-important job numbers are due for release tomorrow.

 

Summary:
GBP: Sterling finishes marginally higher despite early falls.
EUR: Euro demand low ahead of ECB day.
USD: US trade gap widens and ADP job data disappoints.

 

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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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