Today PM Theresa May will again bring a deal to the House of Commons, however on this occasion it will be only the withdrawal agreement that is up for approval, omitting the political declaration. Probabilities currently suggest that this will fail due to lack of support from the DUP and the majority of ERG members.
This does leave a lot of uncertainty out there as from what we can see, Theresa May has used everything in her armoury, including offering to resign, to try and get this deal through. The situation therefore remains that we have just two weeks until we leave without a deal, apply for another extension or revoke article 50 and stay in the EU.
As you’d expect the Pound has dropped this morning as the gravity of the situation sinks into market sentiment and looks vulnerable to further downside pressure as we approach the vote which is scheduled for 2:30pm.
On the data front the Q4 GDP number is due today which will be a good reflection of the state of the UK economy.
The Euro is weaker after German inflation missed estimates yesterday with prices increasing just 1.3% against an expected increase of 1.5% in the month of March. This should be a concern to ECB as the ‘powerhouse of Europe’ struggles. The ECB have made it clear they will look at further monetary policy easing to help the EU economy. This will keep pressure on the single currency in the weeks and months ahead.
The Dollar had a fairly slow day – a mirror image of the GDP data for Q4 for the US – as Q4 GDP missed expectations. The US economy grew at 2.2% on an annualised basis in Q4, missing the 2.3% expectation and the previously strong figure of 2.6%. The Greenback also saw little demand as investors and traders moved into riskier assets on improved sentiment over global trade.
The focus in the US today will be the Personal consumption expenditure for January.
The information, materials, accompanying literature and documentation available on our internet site is for information purposes only and is not intended as a solicitation for funds or a recommendation to trade. XE, its officers, employees and representatives accept no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information.