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By xemarketanalysis March 19, 2018 2:13 pm
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    XE Market Analysis: Brexit Transition Deal Agreed

    OVERVIEW

    • The Brexit transition deal gives Sterling a welcome boost and is a welcomed relief for businesses.
    • US Dollar focuses on the forthcoming FOMC rate decision where rates are expected to rise.
    • The EU trade surplus disappoints as a stronger Euro starts to bite.
    • Putin wins the election convincingly for another six-year term.

    HIGHLIGHT

    We have seen the Sterling rally as a status quo transition deal has been agreed upon. This simply means that any divorce treaty would include an emergency ‘backstop’ to avoid a hard border in Ireland, therefore forming part of the legal text.

    US DOLLAR

    The focus for this week in the US will be on the FOMC rate decision where it is widely expected that interest rates will increase by 25bps to 1.75%.

    BRITISH POUND

    The Pound is trading higher with GBP/EUR rallying to levels above 1.1400, and GBP/USD rallying above 1.40. There is still plenty of negotiating to be done in terms of Brexit, but this transition deal provides a safety net which businesses should welcome.

    EURO

    The Euro continues to encounter resistance as the economic data from the EU seems to disappoint. Today we saw the trade surplus miss expectations by coming in at 19.9bn Euros, versus 22.6bn Euros forecasted.

    CANADIAN DOLLAR

    The Canadian Dollar continues to weaken against its US counterpart as oil prices remain on the back foot.

    AUSTRALIAN DOLLAR

    The Australian Dollar is weaker as metal prices have weakened dramatically over the last couple of trading days. This is negative exposure for Australia as the country is a key exporter of metals.

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