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Pound Bouncing Strongly Before Tuesday’s Voting

Nikhil Khandelwal

Pound Rallied Up On An Optimistic Note

GBPUSD skyrocketed to a new day’s high of 1.3161. Sterling went up after German Chancellor Angela Merkel disclosed some important deal-making news about Brexit.

30 Min GBPUSD Chart 11 March 2019

The news came out that the EU had come into “a highly significant” deal with the UK fostering a deal Brexit. It remains crucial to observe whether the current jump will be sustained by GBPUSD. The pair has seen 7 days consecutive downfall. GBPUSD will be highly affected by the Tuesday’s Second Meaningful Vote update.

Earlier today, Sterling slumped by more than 0.1% to $1.2998 hovering near a three-week low over Brexit jitters. This fall had worsened after British Foreign Minister, Jeremy Hunt alerted on Sunday that the Brexit deal could be reversed if the lawmakers rejected the deal. UK PM Theresa May’s Brexit deal getting rejected on Tuesday will throw the Pound further down. Pound had already made it to seven consecutive falls.

On Tuesday, Theresa May will be trying all possible ways to get support in the Parliament.

Wild Swing in EURGBP Pair

15 Min EURGBP 11 March 2019

EURGBP saw a wild movement in the pair. The EURGBP traded in positive territory and crossed its 2-week high price by touching 0.8675. With a strong move in GBP, the EURGBP pair seen a bearish pressure. It is now in consolidation mode and trading at 0.8545. The pair is trading at a crucial support level of 0.8536

Dollar Index At Its Three-Month High

US Dollar index weighing against the basket of major currencies gained %.
US Retail sales report pushed the index upside. Core Retail Sales soared with a gain of 0.9% from the last month sales of -1.8% and Retail Sales reported 0.2% compared to previous month sales of -1.2%.

“After the ECB’s big downgrade of the growth outlook for the euro area, together with the weaker-than-expected Chinese export and import data, the worry over the global economy is re-surging again. That’s pushing down the euro and other currencies. The U.S. is not particularly strong, but other areas are weak. That’s why the dollar is relatively strong.” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

Japan’s Yen boomerangs

The dollar remained consistently for a quite while around 111 yen level on Monday morning before the release of US Sales report. USDJPY touched low as well as high during the day.

Chinese Yuan Under Worries On Low Export Number

60 Min USDCNY Chart 11 March 2019

China’s Yuan lowered by the end of the day following the release of the country’s February Exports Reports which were down by more than 21%. USD/CNY pair remained sustained near 6.7220.

China being the World’s second-largest Economy to get hit with low exports, this will also significantly impact the Overall World Economy. The primary reason for the decrease in exports was the US tariffs on Chinese imports.

As per recent news, US-China Trade Talks is aligning on a positive note. Larry Kudlow, Director of US Economic Council, said in a recent talk that they are making good progress in signing a great deal with China. The US is highly optimistic at this point. The team is working on the last aspects of the agreement and will soon ink the pact.

Canadian Dollar Traded Slightly Positive

Canadian Dollar remained higher than the USD majorly because of the spike in oil prices. Prolonged OPEC-led Oil Supply cut and lower US Crude Oil helped the Major Oil Exporter (Canada) benefit from the rising oil demand.

Earlier the day, the currency had moved upward following the announcement of the rebounded US retail sales. There had been no significant event about Canada this week (after last Friday). Hence the rise can be supposedly due to the hike in oil prices and subdued US Retail Sales.

This article was originally posted on FX Empire