Daily Update - 21st February 2018
The greenback got market’s favor during the first half of the day, but demand for the US currency receded after Wall Street’s opening, not enough, however to trim its early gains. The macroeconomic calendar remained light, with Germany releasing its ZEW indicator of Economic Sentiment. The Euro declined against US dollar yesterday as investors shrugged off worries about the U.S budget deficit and focused on large U.S government debt auctions this week. The U.S Treasury is preparing to sell more than $250 Billion worth of new debt this week, which analysts said would be a key gauge of international investors’ appetite for U.S. assets. The British Pound refused to give up to dollar’s broad strength. It gained against the dollar yesterday after a media report said the European Parliament would call for giving Britain “privileged” single market access. Growing hopes that Britain and European Union can agree a transition deal, and then terms for the UK that allow it to remain as close as possible to the trading bloc, have helped support sterling this year. According to business insider, European Parliament is preparing to call for a more flexible approach in future relationship talks with Britain. Today, with the release of the February preliminary Markit PMIs for the EU, and the US, while this last, will also release Existing Home Sales data for January, and the Minutes of the latest FOMC meeting. Given that it was the latest preceded by Janet Yellen, who has been already replaced by Jerome Powell, the effects of the wording may be limited. The big item of the United States this week is the release of FOMC minutes today. This could bring some volatility into American market, the January FED meeting had no major announcements or changes. This Wednesday the UK will release its latest employment data, and as usual lately, the star for the day will be wage growth, expected unchanged from its previous reading. Yesterday’s Market
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