Today’s Rates

GBP>EUR – 1.1595

GBP>USD – 1.3068

EUR>USD – 1.1270

GBP>CAD – 1.7384

GBP>AUD – 1.8284

GBP>SEK – 12.090

GBP>AED – 4.7975

GBP>THB – 41.623

GBP>ZAR – 18.350

Today’s Calendar  

Today’s Overview

  • GBP Brexit rumbles on, eyes on EU summit
  • EUR>USD Looks to 1.1275 amid weaker USD, eyes on ECB
  • UK’s Gauke Talks with Labour have found common ground
  • US-China Trade talks to guide FX markets? (Danske Bank)

 Markets

 GBP

Sterling is up modestly against the dollar and most currencies on the week so far, finding a footing and taking a tumble over the last couple of days last week. Cable has lifted back above 1.3050 to put in some distance from Friday’s 10-day low at 1.2987. UK Prime Minister May, and the team will again today be meeting with Labour’s Corbyn, and team, amid ongoing efforts to find a cross-party compromise on Brexit. The potential compromise that May and Corbyn appear to be working on is one that would take the form of May’s Withdrawal Agreement plus a guarantee the UK would remain in the EU’s customs union in the future, which would both satisfy Labour demands while obviating the need for an Irish backstop. If the talks succeed, then the UK would be set to leave on May 22, ahead of European Parliament elections on May 23. If the talks fail, PM May has committed to putting in a series of Brexit options to Parliament. If these options, in turn, fail to produce a consensus, then a referendum or general election may be the only viable ways forward. PM May will be travelling to the continent today for meetings with Germany’s Merkel and France’s Macron. She is then due to appear at the EU’s emergency Brexit summit tomorrow. As things stand, the UK is due to exit the EU on Friday, April 12, at 23:00 London time without a deal in place. Analysists, and judging by the stability of the pound, markets, don’t expect a no-deal to happen; Parliament isn’t countenancing it, while Brussels can be expected to be flexible, so long as the UK persuades it that there is a way forward and there isn’t a “permanent standoff” in Westminster.

 World

Narrow ranges have continued to prevail among the dollar majors for the most part, though the Yen, along with the Australian and Canadian Dollars as saw some modest gains. USD-CAD, in particular, has rotated lows concomitantly with new trend highs in oil prices. Front-month WTI crude prices printed a five-month high at $64.76. Military tension in Libya has been the latest bullish catalyst, which comes amid a backdrop for OPEC supply curtailment and U.S. sanctions against Venezuelan and Iranian crude exports. USD-CAD has dropped sharply over the last day, and today extended to a fresh low, at 1.3304, which is the lowest level seen since last Wednesday. USD-JPY, meanwhile, has traded with a modest downside bias, which saw the pair carve out a one-week low of 111.28. This was seen against a backdrop of net steady stock markets in Asia, with investors turning cautious despite a fresh trend high being posted by the S&P 500 on Wall Street yesterday, in what was an eight consecutive session of gains and what is the longest uninterrupted rally phase since October 2017. A combo of high valuations, President Trump’s threat to tariff European goods, Brexit, expectations for a contraction in Q1 corporate earnings in the U.S., and upcoming trade meetings, due later today, between the EU and China, have collectively given a reason for cautious in equity markets. Market participants are also looking ahead to tomorrow’s release of U.S. CPI data for March given the Fed’s dovish-turn phase has been hinged on a benign inflation outlook. EUR-USD has been consolidation yesterday’s Euro-driven gains to the upper 1.1200s.

 Source: XE Market Analysis Europe: Apr 09, 2019

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