Daily Market Update

Mixed indicators keep U.S. Dollar mostly flat

March 13, 2019

The U.S. Dollar is still on a weakening trend following a busy day on the other side of the Atlantic where, once again, the Brexit deal accorded over the last two and half years was rejected by the U.K. Parliament.

Overview

It is clear that anxiety over the separation will not be going away soon as it seems there will be a delay to the deadline and perhaps a push towards a second popular referendum. The buck is not playing safe-haven to this situation as markets seem to perceive the developments as a chance to see the entire divorce between U.K. and EU being reversed, a positive for greenback counterparts.

Furthermore, Producer Price Index data this morning showed that inflationary growth is slowing down with PPI for February coming in at 0.1% instead of the estimated 0.2%. Prior figures were contractions for the month of January of (-0.1%). On the other hand, Durable Goods Orders showed much improvement as January numbers revealed an unexpected expansion of 0.4% when experts foresaw a contraction of just as much (-0.4%).

This means the economy is becoming harder to predict and that there are some inconsistencies. Per a discussion at the National Economics Club yesterday, Moody’s Chief Economist Mark Zandi explained that Q1 growth could send up being as low as 0.3%, a major turnaround from 2.5%+ last year on average per quarter. Buck could start getting shakier in its strength based on doubts here.

 

What to Watch Today…

  • No major events scheduled for today.

Complete Economic Calendar can be found here.

 

EUR

The Euro is starting to pick up some ground based on the idea that the European economy is not in complete shambles nor hopeless. Industrial Production in the Euro-zone for the month of January came in at 1.4% exceeding the estimated 1.0%.

Recent data has not painted a good picture of the EU’s reality, yet ever since last week that the European Central Bank announced they would exercise some targeted refinancing for banks, positivity in some sectors have boosted the shared-currency’s value. While things remain slow, as long as EU members can avoid deep contractions and recessionary pressures, the Euro will have chance to do more than just recover.

GBP

The Pound swung wildly yesterday during a historic moment for the country as Prime Minister Theresa May could not guarantee the support needed to pass her negotiated Brexit deal. There were reports of late concessions from the EU that could sweeten the pot, but the Tories and other Pro-Brexiteers disagreed while the Remain-side politicians wondered how May could still be in office.

Today’s debate and vote will be on the issue of whether the U.K. leaves the EU without a deal, so those interested in a solution will likely vote against a “no-deal” scenario. Expect more pain, or temporary joy, for Pound as this develops, but know that the Chancellor of the Exchequer Philip Hammond gave a statement in which he cut the country’s growth forecast from 1.6% to 1.2%.

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