European Currencies Steady with Brexit Progress in Focus

European Currencies Steady with Brexit Progress in Focus


The British pound edged higher against major currencies following the news that the European Union and the United Kingdom agreed on a draft declaration setting out their post-Brexit ties. The EU leaders will meet during the weekend to approve the text. Spain is still threatening to vote against the Brexit deal because of Gibraltar. Market participants would prefer to gain more clarity about the deal to asses properly the direction of the market. During the past week, we encountered sessions of high volatility due to Brexit headlines. The GBPUSD gained 0.8% to $1.2875, and the GBPJPY jumped 0.7% to 145.41.


The Euro advanced against the United States dollar supported by the progress of the Brexit deal and receding Italian budget woes. The Italian Deputy Prime minister said that Italy would not change the pillars of 2019 and will show the highest willingness to negotiate with the European Union. The EURUSD added 0.1% to $1.1400, and the EURCHF rose 0.2% to 1.1340.


The dollar index which measures the greenback against a basket of major currencies settled lower for the second consecutive day as European currencies advanced. The Euro and the British pound account for almost 70% of the weight of the dollar index. DXY lost 0.25% to 96.50. The greenback was under pressure for the past two weeks on signals that the Fed could slow the pace of hiking interest rates due to the slowdown in the global economic activity. The USDJPY dropped 0.1% to112.91, and the USDCHF fell 0.3% to 1.3185.


Gold prices remain caught in a tight trading range near a two-week high, driven by safe-haven demand amid growing market uncertainty. As per ICM trading platform, the gold ounce is finding resistance near the $1230 zone and support near the $1220 zone. The silver ounce is also trading in a consolidation zone between $14.20 and $14.55.


Oil prices slumped to fresh 2018 lows, weighed down by excess supply along with deteriorating economic outlook. The West Texas Intermediate crude futures declined 1.4% to $53.81, and the Brent futures lost 1.5% to $62.52. The weak performance continued during the Asian session where Brent futures tested a new 2018 low of $61.52. The US energy services firm Baker Hughes will report the US weekly oil rig count later today.

Major Economic Events

GMT Country Event Expectation Previous
13:30 CA Core CPI (MoM) (Oct)   0.0%
13:30 CA Core Retail Sales (MoM) (Sep) 0.3% -0.4%
18:00 US U.S. Baker Hughes Oil Rig Count   888


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