The Pound continues to trade under pressure as weekend headlines suggest that no further progress in Brexit negotiations have been made. Reports suggest that Junker and PM May spoke last night, but she has no plans to make the trip to Brussels. Further reports in the Times have suggested that senior Tory lawmakers have urged the PM to cancel the ‘meaningful vote’ as estimates suggest she will lose the vote by around 100 votes.
Should this tone persist, we may be in for another session of a weak pound as traders and investors look to sell out of the UK unit and find a safe haven ahead of Tuesday's vote. It is quiet on the data front today and therefore all focus will be on any political statements from either the EU of UK governments.
Further afield in the US, the Dollar continues to reflect the shocking non-farm payroll number released on Friday. The US managed to add just 20,000 jobs in the month of February – a whopping 169,000 below the market forecast. Obviously, this can be taken with ‘a pinch of salt’ as this data can be significantly revised when the March number is released and many analysts take a longer term trend outlook on this number. It does however suggest that the Fed may be correct in there decision to leave interest rates unchanged and be patient in their approach to the next move. The full impact of this number may not yet be seen in the Dollar.
The Euro has started the week where it left off, on a negative tone as German industrial production and trade balance numbers already released this morning were significantly worse than expected. After the European powerhouse recently marginally missed recession – the outlook remains bleak.
The Week Ahead
The main focuses this week will be the votes on Tuesday, Wednesday and Thursday in the house of Commons in the UK, US Inflation data on Tuesday and the Bank of Japans interest rate announcement on Friday.
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.