Daily Update - 20th February 2018
The greenback extended last Friday's short-covering rally on gained broadly vs its major’s peers in holiday-thinned North American trading as financial markets in U.S. and Canada were closed for market holiday. The Euro declined against the greenback on Friday after data showed stronger-than-expected housing starts and import prices, suggesting that inflation was on the rise and economy on a stable growth path. The reports backed a growing belief that the Federal Reserve could hike interest rates at a faster-than-expected pace this year. There are renewed concerns over the EU-UK trade deal hit the GBP markets, after the sources said that the British senior officials are working on a contingency plan to hold the Brexit cash if the EU refuses to trade. This indicates that the UK is already aware that the sentiment could turn sour should the Brexit negotiations go wrong. Following a quiet start to the week, economic data out of the Eurozone this morning includes wholesale price inflation, together with consumer and business confidence figures out of Germany and economic sentiment numbers out of the Eurozone. Later in the day, the Eurozone’s Consumer Confidence flash figures will also be released, with the EUR expected to respond to today’s figures. Based on forecasts, the numbers are on the softer side, which should limit any upward moves in the EUR, if the data is in line with or worse than forecasted, though much will depend on the Dollar through the day. Later today, the pound will look forward to the UK Brexit Secretary Davis’ comments, as he is scheduled to outline a fresh Brexit trade deal plan.Yesterday’s Market
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