Daily FX Market Round 22 March 2019
Kathy Lien, CEO of FX Strategy for BK Asset Management
What a difference a week can make in the forex market. There were 3 major revelations – the Federal Reserve does not expect to raise again this year, Europe is at the limit of the recession, and Britain received a brief unsatisfactory extension of Article 50. As a result, consolidations were changed as economic data and central bank policies gave investors a clearer sense of where and other currencies should lead next time. The greenback ended the week sharply lower against it, but higher courage, and dollar. At some point after the Federal Reserve meeting, it seemed that it could have been a week when all the major currencies would be pushed higher with a depreciating US dollar. But a smaller Hawk Fed can only hurt the dollar so much when the bigger problem is weaker global growth. In the future, we expect that many of the new trends that were established last week will continue because the economic calendar is busy, events this week not as market movements as the last and have much less potential to completely change the market mood.
Friday's worst performance currency was the one that tumbled lower after terrible PMI data. EUR / USD broke 1
Meanwhile, the UK Prime Minister has finally requested an extension of Article 50 and the European Union approved a delay but not the one she was looking for. You said that if May can persuade MEPs to accept the current readmission agreement, the United Kingdom would leave the European Union on 22 May one day before the elections to the European Parliament. But if she fails, they have until April 12. At that time, they must decide whether the current agreement, no agreement or no Brexit is their next act. The EU tells Britain that they will have done better or worse with Brexit. They refuse to be caught in a long extension. Unfortunately, this means that a disturbing Brexit is still on the table, so even though the week ended, the risk of the downside is. Brexit completely overshadowed the bank of England and British data. BoE voted unanimously to leave interest rates unchanged and said that Brexit could ask for political action in both directions. They also warned that employment growth could be moderately significant, as several companies trigger Brexit plans. Instead of falling, sterling jumped after the course decision, because the central bank said "gradually that there is probably a need for limited tightening." The UK and the reports were also stronger than expected. However, there was no impact on GBP except Brexit and it will remain the case in the coming weeks.
The unexpected fall in Canadian at the beginning of the year sealed the fate of the loonie. broke 1.34 after the retail trade fell -0.3% for the second month in a row. The case of bank of canada today strengthens as spending and trading crater. is scheduled for release on Friday and growth may fall even further. The one good news was that it rose 0.7% in February, but at 1.5%, growth is still well below the central bank's target level.
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