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British MPs Vote to Give May Power to Trigger Article 50

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USD
On Wednesday, the Federal Reserve decided not to increase the interest rates at the conclusion of a two-day meeting; however, it did give a sign to growing optimism among the business consumers and community at its first gathering since President Trump took office. The FOMC held its benchmark overnight with the lending rate target staying in a range of 0.5% to 0.75%. The U.S. dollar index, which measures the greenback against a basket of major currencies, settled at 99.65 pips, after falling by 2.6%, the worst in 30-years due to Trump’s comments.

GBP
Elsewhere, British parliament voted more than three to one in favoring of starting the “Brexit” process and triggering Article 50. MPs voted 498 to 114 to advance the bill that would give the UK government the power to invoke Article 50. The Sterling pound was strongly affected by such voting and hit the resistance level of $1.27 vs. USD. Technically, Cable could decline to $1.26.

Euro
Euro declined yesterday to $1,077 vs. USD, however, the Eurozone manufacturing PMI rose in January to a 6-year high.

Gold
Gold was slightly affected by FOMC statement and settled at $1,208. Technically, the yellow metal could re-test $1,200 in anticipation of the U.S. Nonfarm Payrolls, which will be released tomorrow.

Oil
Oil pared its gains as data showed that the U.S. gasoline and crude stockpiles increased sharply. In addition, Oil prices were affected by the Russian energy minister’s comment that Global oil output was cut by 1.4 million barrels per day (bpd) last month. U.S. crude touched yesterday $53.70 before returning to $53.30.

The most important economic events:

  • GBP Bank of England Rate Decision (FEB 02): (GMT – 14:00) – Important – Forecast (435b) – Previous (435b).
  • GBP Bank of England Inflation Report: (GMT – 14:00) – Important
  • GBP Carney Speaks at Inflation Report Press Conference: (GMT – 14:00) – Important

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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