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By xemarketanalysis February 27, 2017 2:27 pm
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    XE Market Analysis: Pound Falls on Risk of Scottish Referendum

    OVERVIEW

    • U.S. durable goods orders rose 1.8% as expected last month. New orders for U.S.-made capital goods however, unexpectedly fell.
    • Eurozone economic sentiment edged up 0.1 points as expected to 108 in February due to increased optimism in the industry and service sectors.
    • Germany's deputy finance minister reiterated the government's opposition to debt relief for Greece despite calls from the IMF.
    • The Confederation of British Industry stated optimistic outlook among business and professional service firms was the highest since November 2015.

    HIGHLIGHT

    The Pound is down 0.5% against the Dollar and 0.6% against the Euro following a news article claiming Theresa May is preparing for another independence referendum in Scotland.

    US DOLLAR

    The US Dollar is down marginally on the day due to both a slightly weaker order for goods and an unexpected fall in pending home sales. Trump's State of the Union address tomorrow, along with the purchasing manager's index, are the key events to watch this week.

    BRITISH POUND

    The Pound is down across the board today as a potential Scottish referendum adds to concerns over the UK's political challenges in the years ahead. February's purchasing manager's index will be the main focus this week to see if the robust growth is set to continue as we approach the true beginning of Brexit.

    EURO

    The Euro is higher today on signs that election risks are subsiding. The latest polls show centrist Macron is closing the gap on the far-right's Le Pen in the first-round of France’s election. Due this week, headline inflation data is forecasting a further increase in the pace of February’s CPI to 2%, which will add to questions about the ECB's vast stimulus.

    CANADIAN DOLLAR

    The Loonie continues to trade in a 1.30-1.35 range against the US Dollar and is flat on the day.

    AUSTRALIAN DOLLAR

    The Aussie Dollar is marginally higher on the day with market sentiment just starting to turn positive, which should favor the commodity linked currency. Fourth quarter GDP growth is the main event this week and is forecast to show the economy rebounded 0.7%, after contracting 0.5% in the third quarter.

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