Yahoo Finance Sterling Drops With The Continued Brexit Drama
Pound Cools Down With Lined-Up Another Brexit Vote
Sterling was hovering at its nine-month high value in the earlier day. The currency, however, tumbled today in Asia following the rejection of a no-deal Brexit by the UK Parliament Lawmakers. GBP/USD had followed an upward movement by more than 2% reaching 1.3339 in the morning session. These gains were wiped off after the broadcast of the rejection news. Pound anticipates the next vote session which will take the call on an extension to the Brexit on March 29.
Russel Silberston, Co-Head of Multi-Asset at Investec Asset Management commented that “If they manage to achieve cross-party support for a deal, likely a ‘softer Brexit’ sort of a deal – this could potentially be excellent news for UK assets. If Parliament fails to come into an agreement, it would go to a second referendum. My concern is that this would call into question the role of Parliament and could have future severe political consequences.”
USD Index
USD Index which calculates the greenback weighing against the six major currencies gained by 0.2% reaching 96.769. This was bolstered with the slump in Pound after a Brexit vote possessing low clarity.
President Trump “anticipates” a UK-US trade deal post-Brexit. The US Trade Representative’s Office said it wants to cut tariff and non-tariff barriers and iron out regulatory differences between the countries laying hopes for a great deal with the UK.
Disappointing Chinese Data Elevated USD/CNY Pair
USD/CNY pair soared by 0.1% reaching 6.7108 following a disappointing Chinese Industrial Data for January and February which was lower than consensus by 0.2 %. The data recorded the lowest growth rate in the last 17 years. China Retail sales were recorded as 8.2% which was 0.1% above the consensus. China Fixed-asset Investment was in-line with market expectations. These marginally improved data seemed insufficient to uplift the CNY.
Delay in the US-China trade talk settlement elevated USDCNY pair close to a strong resistance level of 6.7300. The pair seemed to remain sustained under this strong resistance level for the last couple of weeks.
Chinese Yuan Falling Stirring Down The Aussie Dollar
The AUD/USD pair fell by 0.4% reaching 0.7060 after the lower than expected Chinese data announcement in the morning session. Australian bond yields reported lower numbers. The pair continued the downfall after a delay in the US-China trade settlement was reported. The news announced that the meeting between President Trump and President Xi is not expected to happen within this month, instead is hoped to be finalized in the early weeks of April.
USD/CAD Gains With Fall In Crude Prices
The pair had been accumulating gains since last few days with rising crude prices. The rally continued after oil prices started falling off later the day. By mid-day, the price of West Texas Intermediate lowered down from the 2019 high of $58.65 per barrel to $58 per barrel. The US-China trade talk delay news added to the pain for CAD further accelerating the pair value. Along with this, around 1% increase was observed in the 10-year T-bond yield which gave an impetus to USD Index. USD/CAD uplifted by 0.2% reaching 1.3330.
USDJPY Aiming For 112.00 Level
USD Index posted gains today while Yen slips ahead of the release of the rate statement by the Bank of Japan later the day. The USDJPY pair traded at around 111.66 nearing 112.00. The critical resistance area for the pair lies in the range of 112.20 and 112.80. If 112.20 level is broken, it creates ample buying opportunities till the next resistance level.
This article was originally posted on FX Empire
