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By xemarketanalysis March 14, 2019 11:35 am
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    XE Market Analysis: Mr Speaker, the PM Lost Her Voice and Brexit Faces Third Vote

    OVERVIEW

    • DXY Index is up 0.25% as US Administration signals deal with China is close but not yet done.

    • GBP/USD remains choppy with MPs voting to extend Article 50.

    • NYMEX Oil climbs to four-month high over supply concerns.

    HIGHLIGHT

    There is a sense of temporary calm before a new storm. Brexit saga remains at the centre stage and will continue to dictate the direction of the Pound. As we mentioned yesterday, the MPs voted to reject a no-deal exit from the EU. Today. They will vote again to extend Article 50 with the ultimate goal of drafting a new exit deal agreeable to both parties.

    US DOLLAR

    Tweets from the  White House condemning recent spikes in crude oil prices and US dollar are likely to follow soon. The US dollar Index is up 0.25% under a light economic calendar.

    BRITISH POUND

    The Pound and the world markets continue to watch Brexit drama from the British Parliament where the politicians are meeting again for yet another vote: this time to agree on an extension of the exit date along with concocting a real deal. GBP remains volatile after firming 2.45% against the greenback yesterday.

    The right honourable friends in the House of Commons voted to reject a no-deal split from the EU yesterday. They return to vote today on an extension of Article 50. A short extension is very unlikely to yield a deal acceptable to both parties. It took nearly three years to draft a Withdrawal Agreement which was voted down twice. A longer extension will add more uncertainty for businesses and the Pound. GBP/USD is down 0.2% as we enter the NA session and is expected to remain very choppy.

    EURO

    EUR/USD is unable to maintain its four-day winning streak, down 0.3% on the day. The economic calendar is very light, and investors will be hoping the soft data out of China does not have a global spill-over effect. New developments around Brexit will once again dictate the pace and direction of the euro.

    CANADIAN DOLLAR

    USD/CAD halted a four-day slide and trading above the 1.33 levels following the releases of higher than expected US import prices (+0.6%) and New Housing Price Index in Canada falling for the first time since February 2018. The Index declined by 0.1%. Non-resident speculation tax and measures to cool the housing market are the main drivers behind today’s numbers.

    We expect the loonie to attract bids; however on the further back increase in WTI oil prices. Crude oil is trading at its highest level in four months after EIA reports showed a decline in oil stocks. The market will wait for BoC Deputy Governor Wilkins’ speech on risks to global growth for more trading impetus.

    AUSTRALIAN DOLLAR

    Meanwhile, away from all Brexit spectacle, Chinese data were disappointingly dragging the equities market lower. Antipodean currencies are under pressure as well. The Aussie is down by 0.5%. Oil prices touched a new high for 2019 as a result of disruption of supply and talks of extending the OPEC output cut.

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