US Dollar buffeted by mixed macroeconomic news

We did, however, get a contrastingly more upbeat services PMI for February, which leapt back to an eight month high 56.2, well above consensus. While a very good sign, the rally it fuelled in the greenback was limited and the US currency ended London trading roughly where it began versus the Euro.

Next up for EUR/USD will be this morning’s Eurozone inflation numbers and a couple of speeches from central bank members from both sides of the Atlantic. The main draw will undoubtedly be an appearance from President of the ECB Mario Draghi at 15:30 GMT. Fed members Clarida and Williams could also shift the US Dollar when they speak later today.

Pound holds firm on hopes of A50 extension

Sterling continues to remain fairly resilient to the threat of a ‘no deal’ Brexit and has spent the past couple of trading sessions above the 1.30 mark against the US Dollar.

The resilience shown in the UK currency is remarkable given that no progress is being made towards forcing a Brexit deal through parliament before the 29th March EU exit date. Theresa May has met with a number of EU leaders this week, predominantly President of the European Commission Jean-Claude Juncker. This has, however, so far failed to yield any form of concessions or compromise and it is likely that May will return to MPs next week with a withdrawal agreement very similar or identical to the one that was shot down so resoundingly in January.

The lack of a negative reaction in the Pound can largely be attributed to the fact that the market is still discounting the possibility of a ‘no deal’. The general consensus appears to believe that cooler heads will prevail and that an extension to Article 50 will be triggered at some point in the next five weeks or so. This, as we have mentioned in the past few weeks, would prove good news for Sterling.