Forex - AUD/USD, AUD/NZD Flows: Weaker consumer confidence weigh on the AUD

 23:43 (GMT) 12 Mar

  [Forex Flows]

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AUD/USD, AUD/NZD Flows: Weaker consumer confidence weigh on the AUD (0101-JNHL-C01)

AUD had a larger than usual reaction on the consumer confidence data given the increased market focus on the weak run of domestic data (poor 4Q GDP etc. and weak business sentiment released on Tues). The consumer confidence index fell to the lowest since Sep 2017, fuelling worries over household spending (a key area of concern for the RBA) which might have felt the bite from weaker housing market. The index fell 4.8%m/m in March from an increase of 4.3%m/m in February.
AUD/USD fell 15 pips, not a big move but more notable than usual. AUD/NZD extended losses to below 1.03 before buyers step in, helping the AUD/USD prevent further losses beyond Tuesday's low.
Further selling on the data is unlikely (until a clearer trend establishes on consumer confidence or impact on household spending becomes more pronounced) and focus for the AUD will be back on the global growth picture and risk sentiment.

Forex - GBP/USD, EUR/GBP Flows: May going to Strasbourg

 17:42 (GMT) 11 Mar

 [Forex Flows]

The GBP has seen some decent covering of shorts today on hopes of a breakthrough before PM May's deal with the EU is put to the vote again tomorrow. The situation is fluid but PM May is now confirmed to be flying to Strasbourg for last ditch talks, that after the BBC reported that she and Attorney General Cox had some kind of deal to put to parliament (it appears that is something less than a deal with the EU). We remain skeptical that a deal that parliament will be able to get behind can be reached but optimism may persist through the New York close, Euroskeptic MP Iain Duncan Smith speculating about a statement at 9pm UK time (which is 5pm in New York after the US clock change).

Forex - GBP/USD, EUR/GBP Flows: Rough start for the GBP, more volatility expected ahead of vote

 00:06 (GMT) 11 Mar

 [Forex Flows]

GBP fell at the open, weakness has eased moderately since. There was no short of Brexit headlines, largely negative on the Brexit situation. PM May's deal is still almost certainly going to fail to pass on March 12, that hasn't change. However, her position now is in greater threat as Telegraph reported that only 2 UK cabinet ministers still backs her. A vote of no confidence in the government could also be tabled by the Labour. The EU is also reported by Telegraph that Britain would be expected to be penalised for Brexit delay, $1.3b a month is the reported demand from the EU.
Cable opened below the 200dma that restricted last week's losses at Friday's close, the technical indicator now capping the bounce. EUR/GBP jumped to Friday's high.
If May suffers defeat by 100 or more, the EU might insist on a longer delay. However the EU's toughening stance is dampening the benefits for the UK economy that we are going to see a long delay, should the vote fails on Tuesday as we and market expected.

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