News & analysis


Sterling ended yesterday’s session in the green against the dollar ahead of the meaningful vote on the draft withdrawal deal that is set to take place next week. Meanwhile, May continues to hold her breath as she hopes for last-minute concessions from the EU to convince Parliament to back her deal.  However, the fragility of her position was underlined again yesterday when it emerged that she’s considering accepting an amendment drafted by pro-EU lawmakers that aims to prevent a no-deal exit.


The single currency gained some strength yesterday in a day that saw the EUR/USD near the upper limit of recent ranges. The long-term trend of the currency pair has caught highs on a daily closing basis four times in the last 2 and a half weeks despite relative yields falling. Fresh dovish statements from Fed officials continue to confirm the markets recent adjustment that the Fed will hold on further tightening in light of volatile and uncertain financial conditions in 2019. Data wise, although last releases have not provided further optimism to the recovery of the eurozone, retail sales and investor confidence made some advance relative to expectations. Today, a wide array of confidence indicators coming at 10:00 GMT will shed further lights.


The greenback had another weak session yesterday, finishing among the worst performers of the G10 currency board. Some of the downwind came from Atlanta´s FED Bostic, who offered new dovish comments signaling one rate hike for 2019 instead of the two moves he had previously envisaged. The ISM Non-Manufacturing Index came at a 57.6 level, considerably below its prior reading and disappointing market expectations. Meanwhile, US-China trade talks will continue its second round today while the government shutdown keeps mounting the uncertainty levels across global investors.


The loonie sat in the middle of the G10 currency board against the dollar yesterday on the back of the weak news coming from the US. These recent move adds to the positive trend the currency has had since the beginning of the year, despite no steady improvement in oil prices thus far. Although recent data from labour market provides further support to the case of keeping unchanged the monetary policy in tomorrow´s rate announcement, BoC statements on forward guidance will be looked for extensively to signal further moves of the currency pair.