Sterling was supported by the House of Commons vote to demand a further Brexit extension, although uncertainty remained intense.

A weaker than expected US ISM services report curbed dollar support with EUR/USD near 1.1250 but buying was discouraged by a sharp decline in German factory orders.

Risk appetite held firm on US-China trade hopes with global equities close to 6-month highs despite pressure for profit taking.

After posting fresh 5-month highs, oil prices corrected lower after a large inventory build.

Commodity currencies were unable to make further headway.

Sterling was supported by the House of Commons vote to demand a further Brexit extension, although uncertainty remained intense.

The UK PMI services-sector index declined to 48.9 from 51.3 the previous month, below market expectations and the first contraction reading since July 2016. New orders declined for the third successive month with activity hurt by political uncertainty. Sterling lost ground, although losses were limited as markets continued to monitor Brexit developments with GBP/USD support near 1.3100.

Bank of England Governor Carney stated that the risks of a ‘no-deal Brexit were alarmingly high which briefly hurt Sterling. The EU stated that it would not accept another short-term Article 50 extension without the Withdrawal Agreement being approved.

Reports on Prime Minister May’s talks with the Labour Party were mixed, but overall expectations of a breakthrough were low. The House of Commons passed a Bill forcing Prime Minister May to seek a further Article 50 extension with the EU. The majority of one maintained extremely high tensions and uncertainty, especially given that the EU would need to approve an extension at next week’s summit meeting.

GBP/USD secured net gains to near 1.3180 against the dollar on Thursday given expectations of a longer Brexit extension with GBP/EUR holding firm around 1.1720.

Economic Calendar

Expected Previous
07:00 German Factory Orders (M/M)(FEB) 0.30% -2.10%
08:30 GBP PMI Construction(MAR) 49.8 49.5
12:30 ECB Monetary Policy Meeting Accounts - -
13:30 USD Continuing Jobless Claims(MAR 09) 1.750K 1.756K
13:30 USD Initial Jobless Claims(MAR 09) 216K 211K
15:00 CAD Ivey PMI(M/M)(MAR) 51.4 50.6
18:00 FOMC Member Mester Speaks - -
21:00 FOMC member John C. Williams speech - -

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.