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Euro weakens as ECB Launches Fresh Stimulus.

8th March 2019 Market Update

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🇬🇧 GBP –  Sterling fell yesterday, noticeably against the dollar as Brexit negotiations seem to struggle again. With the European Commission stationing that the Brexit negotiations have been difficult and “no solution has been identified” to the Irish backstop. The EU has reportedly given Theresa May 48 hours to come up with a new plan for the backstop to help break the deadlock.

No real data to be released today, but Theresa May has said that she will release a statement today about the deal she will put to parliament however Reuters believe nothing will change over the next 24 hours.

🇪🇺 EUR – Yesterday morning Eurozone GDP figures came out 0.1% worse than expected at 1.1%, however this had little impact, though later in the day the euro fell off following a surprise double dovish move on monetary policy from the ECB. The ECB announced that they will extend the time horizon in which they will not raise interest rates and unveiled more cheap funding for banks. The move further compounds the ECB’s concerns of a growth slowdown in some large economies, with Germany and Italy struggling.

Today, markets will spend time digesting the news and looking forward to any further comments and evidence of further slowdown in the Eurozone. Though we have very little on the calendar in terms of data releases today.

🇺🇸 USD – The dollar benefited from a slump in the pound yesterday, in addition jobless claims figures surprised to the upside yesterday and as a precursor to todays jobs data, we could see another positive reading.

This afternoon, jobs data will be key with a fall in unemployment rate expected and the all important non farm payrolls also due. A strong report here could well see the USD end the week on a high.

 

Summary:
GBP: Report of Brexit impasse.
EUR: New stimulus unveiled by the ECB.
USD: Dollar in high demand following ECB decision.

 

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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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