23/ 05/ 2019

Brexit and European Election Will Drive the Market

Brexit stole the show yesterday, leaving the EUR/USD pair confined to familiar levels.

US Federal Reserve released the Minutes of its latest meeting in the US afternoon but failed to surprise reaffirming the 'patient' stance. The statement was overshadowed ahead of the release by Powell's comments late Monday, indicating that policymakers are in no rush to make a move, even if the economy improves. The lack of stats left the markets to respond to trade war chatter and the FOMC meeting minutes released late on Wednesday.

It’s a busy day ahead on the economic calendar. Alongside the stats, geopolitics will continue to be a factor through the day. Another consideration will be the Brexit and the EU Parliamentary elections that are expected to bring an early end to British Prime Minister Theresa May’s political career.

22/ 05/ 2019

Risk Hit Again by US-China Trade Woes; Draghi & UK CPI Up Next

The shared currency maintains the harsh tone against its American rival, having failed to preserve gains. The EUR/USD pair getting a temporary boost from Pound’s strength, this last jumping on news that UK PM Theresa May was offering a new Brexit deal and allowing Parliament to decide on a second referendum. 

The GBP/USD pair jumped to 1.2785 mid-US session following headlines indicating that UK PM May deal would offer a new Brexit option to the Parliament, also allow voting on a second referendum. The Brexit political chaos has been a significant drag for Sterling, further weighing after cross-party talks ended without an agreement.

UK Inflation and European politics to whipsaw the Pound ahead of the FED monetary policy meeting minutes later today.

21/ 05/ 2019

Dollar Holds Awaiting Signals on Trade & Fed Policy

It was a dull start to the week for European currencies, which spent the day consolidating their recent losses. Risk-averse headlines dominated the news feeds, although most of them related to familiar issues, named the US-Sino trade war and Brexit, failing to provide a fresh catalyst. Minor data released in both economies failed to motivate market players, as the German PPI came in mixed.

The GBP/USD pair started the day correcting higher, but the Sterling was unable to hold on to gains, finishing the day unchanged at around 1.2720. The pound edged higher against dollar on Monday, as Britain's prime minister made a final effort to get a Brexit deal through parliament before she leaves office. After failing three times to get parliament's approval for her EU divorce deal, Theresa May said she would present a "new, bold offer" to lawmakers with "an improved package of measures" in a final attempt to secure a Brexit deal.

19/ 05/ 2019

Week Ahead | Euro Braces for Volatility Ahead of EU Elections, ECB Minutes

It was a rough week for the common currency, as persistent tensions between the US and China kept high-yielding currencies away from speculative interest's radar. 

The trade war between the US and China worsened after China retaliated and markets rattled. China struck back with counter-tariffs and hints it goes further. Stock markets fell and the safe-haven yen was the big winner.  A trade deal is now rather out of sight, not even a next meeting. While the decision on auto tariffs was postponed, US did confirm auto imports as national security threats. Major exporters like EU and Japan will have six months to make a deal with the US, or we’ll see US-led trade wars escalating further. Nevertheless, the better news was that a deal was agreed between US, Canada and Mexico to eliminate steel and aluminum tariffs.

The pound suffered from the impasse in cross-party Brexit talks while commodity currencies were also on the back foot despite rising tensions in the Persian Gulf. The Sterling extended its downward route against its major rivals, resulting in the GBP/USD pair trading as low as 1.2787, a level that was last seen mid-February. Brexit-related political chaos has finally taken its toll on PM May, who has promised to set a timetable for the election of her successor after submitting her Brexit deal to the Parliament for a fourth time at the beginning of June.

Apart from trade and Brexit, the FOMC minutes, US durable goods orders, and other events will move the market.