The U.S. Dollar sustained its momentum from last week as news broke over the weekend about the much expected Mueller Report and anti-Brexit protests in London demanding a second referendum on the question.
Now that the Mueller cloud is going away, trade war with China and budgetary talks will take over headlines, which could certainly have an impact on the dollar, one that we feel may be negative. Additionally, the Fed’s caution will be put to the test as speculation grows on the central bank’s willingness to cut rates if they see fit.
Focus on Brexit will keep Pound fluctuating wildly since this week is expected to be one filled with votes attempting to reach a consensus so that there can be a separation by the new April 12th Brexit deadline. Political distractions can be pushed aside here on our end to focus on the slew of data that will paint a clear picture of the economy prior to the official end of Q1. There is Consumer Confidence tomorrow, Gross Domestic Product on Thursday, and Personal Income on Friday.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
The Euro will likely remain under pressure this week with a ton of data coming in for major economies, like GDP for France tomorrow and inflation in the form of Consumer Price Index out of Germany on Thursday. It has been established that the economy is going through a slowdown and that the ECB will start long-term refinancing with banks in September, thus any guidance for the shared currency will come primarily from the breakdown of data describing Q1: positivity will push euro higher, recessionary-type figures will keep it from gaining, perhaps dent it further, though we have seen current levels remain for Euro despite one-day/two-day dips.
The Pound had fallen last week, but renewed hopes that some order will come with the separation pushed it upward. Prime Minister Theresa May had said the will of the people was not being respected since Parliament had rejected her deal twice, but street marches over the weekend showed anti-Brexit protesters reaching almost one million and saying the will of the people would be met if a second referendum was scheduled.
Some politicians on the Labour side are now suggesting the people should get to vote on the existing Brexit deal against staying in the EU as is. Avoiding Brexit altogether still has a chance and with about seven votes potentially scheduled for Parliament this week asking every scenario’s approval from a Canada-type deal to Customs Union permanence, Sterling will not be easy to predict, but it will not sink before April 12.