The pound fell sharply last night after a proposal in Parliament, aimed at avoiding the potentially hazardous ‘no deal’ Brexit scenario, was voted down. Markets were widely expecting an amendment put forward by Labour MP Yvette Cooper, giving Parliament the power to instruct the government to request an extension to Article 50 from the EU, to pass through Parliament but it was voted down by a surprisingly large margin. This has now once again opened the possibility of a ‘no deal’ Brexit and the pound acted accordingly, falling around 0.7% against a basket of currencies. The fortunes of the pound are now in the hands of Theresa May as she goes back to Brussels seeking further concessions. If she can pull off the extraordinary feat of changing the minds of EU lawmakers and getting a deal agreed by 29th Marchthen expect the pound to rocket, but it will no doubt continue to be a bumpy road on the way.

The Australian dollar has surged early this morning after inflation figures beat forecasts. There has been a lot of speculation recently about the possibility of an interest rate cut over in Australia, but this inflation news has helped to ease these rumours. The Aussie dollar spiked immediately, jumping 0.5% versus the US dollar.

Todays Data Releases

A quiet day for the UK and Eurozone with no major data releases from either.

We could be in for a busy day for USD crosses. The Fed will be releasing their interest rate decision this evening, with rates expected to remain unchanged. It is however the accompanying press conference that will be closely scrutinised. Investors will be listening out for any hints as to how many times the Fed will be raising rates this year, if at all. The US and China will also hold two days of trade talks, starting today.

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