Kantox currency update: pound picks up ahead of the no-deal vote
The pound is picking up on Wednesday’s early trading, to pare the decline triggered by the second defeat of Theresa May’s EU withdrawal proposal, with the market expecting the MPs to vote down a no-deal Brexit later today.
With the Brexit news attracting the focus, the rest of the currencies have remained trading within previous ranges, with the US dollar slightly lower after weaker than expected US inflation figures, which has helped the euro to put more distance from the 21-month lows hit last week.
EUR/USD recovery extends to 1.1300. The euro appreciated again on Tuesday, to reach intra-day highs at 1.1305, favoured by moderate dollar weakness and market hopes that the UK parliament will reject a no-deal Brexit. As at the London market opening times, the EUR/USD is trading at 1.1285.
GBP/USD pullback, contained at 1.3000. The pound retreated from two-week highs near 1.3300 after the Brexit parliamentary vote to find support at 1.3000 before picking up to the mid-ranges of 1.3100 on Wednesday’s early trading. As at London market opening times, the GBP/USD is trading at 1.3130.
USD/JPY limited below 111.50. The dollar ticked up on Tuesday to extend its rebound from last week lows at 110.75, although the pair remains unable to extend beyond 111.50. As at London market opening times, the USD/JPY is trading at 111.35.
In the Calendar Today
Today, in the Eurozone, Eurostat will release January’s industrial production, which is expected to have picked up after two consecutive declines and might have a minor impact on the euro.
In the US, Census Bureau will release the durable goods orders, which are expected to have contracted in January. As a leading indicator of industrial activity, a sharper than expected decline in durable orders tend to have a bearish impact on the US dollar.
10:00 GMT EZ: Industrial Production (MoM) (Jan)
Prev: -0.9% Cons: 1.0%
12:30 GMT US: Durable Goods Orders (MoM) (Feb)
Prev: 1.2% Cons: -0.5%