Pound remains firmly in 6 month trading range
- USD losing streak continues since Fed meeting
- G-20 meeting ends with US getting their way
- First French Presidential debate tonight
USD Losing streak continues since Fed meeting
The US Dollar has weakened against across the board for the fourth consecutive day heading for it’s longest consecutive run of losses since the US election.
Since the Fed’s more dovish than expected statement last week the USD has been punished, and this saw the GBP/USD rate bounce back off the bottom of the recent trading range. This bounce was given extra spring with dissenting Bank of England member Kristin Forbes voting for a rate hike at the last MPC meeting going against all other members who voted to keep the bank rate on hold. This took markets by surprise and as such the pound enjoyed a smooth run higher to end last week and continuing into early trading this week.
GBP/USD has oscillated in a 7.5 cent range for the last 6 months. Before the central bank action last week we were on course to test the bottom of this range, however these surprises to the market have seen the pound trend higher and this range-bound price action looks set to continue. With a quiet week on the data front locally, markets will look for direction from developments with regards to the triggering of Article 50 and the Scottish referendum. In the US we will be closely watching central bank and political speeches with President Trump and Fed chair Yellen speaking among others.
G20 meeting ends with US getting their way
The meeting in Baden Baden, Germany saw the US get their way on issues involving free trade and climate change.
US Treasury Secretary Mnuchin said he could not be happier with the deal while his French counterpart Sapin expressed regret at the outcome in terms of both trade and climate change. For over a decade the G20 has strongly backed open trade, however it only received a token mention in Saturday’s communique. According to Reuters some said at times it was 19 against 1 regarding the free trade pledge, but the US would not yield on key issues. This could essentially unwind many earlier agreements as the G20 requires a consensus on all issues.
First French Presidential debate tonight
The five French front runners are set to come together for the first time tonight at 8pm London time.
LePen, Hamon, Fillon, Melenchon and Macron will be presenting arguments on three themes: Society, Economy and International Policy. In an Odoxa poll over the weekend Marcon is the front runner with 26.5 percent, just ahead of far-right leader Le Pen on 26 percent.
The official campaign period began on Saturday when France's Constitutional Council announced a list of 11 contenders who will be vying for votes when the French head to the polls on April 23 and May 7 in the two round election.
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