Political concerns dominated amid reports that Westminster support for the Withdrawal Agreement was fading further.
A lack of confidence in other major currencies helped trigger a sharp dollar recovery in choppy trading on Thursday despite weaker underlying sentiment after the Fed statement.
Political fears undermined Sterling during Thursday and had a negative Euro impact before a tentative recovery on Friday as the EU granted a Brexit extension.
Oil prices were underpinned by tighter supplies but faded slightly after posting fresh 4-month highs.
The Norwegian krone strengthened sharply after a Norges Bank rate hike and hawkish statement.
Expectations of dovish global central bank policies helped underpin global equities.
Precious metals moved lower as the dollar regained ground before a tentative recovery.
Headline UK retail sales increased 0.4% for February compared with consensus forecasts of a 0.4% decline with the year-on-year increase holding at 4.0% from 4.1% previously and government borrowing data remained strong.
The Bank of England maintained interest rates at 0.75% with a 9-0 vote. The bank was slightly more cautious over the economic outlook and reiterated that the outlook was dependent on a smooth Brexit process The committee repeated that gradual and limited interest rate increases were likely over the medium term, but markets remained unconvinced with futures indicating that the chances of a rate hike by December had declined to below 20% and lower gilt yields undermined Sterling.
Political concerns dominated amid reports that Westminster support for the Withdrawal Agreement was fading further and market fears over a ‘no-deal’ outcome increased. GBP/USD dipped sharply to lows just above 1.3000 with GBP/EUR dipping below 1.1500.
After prolonged debate, the EU granted a Brexit extension to May 22nd if the Withdrawal Deal is passed, but only to April 12th if the deal is rejected again. Relief over an extension triggered a Sterling recovery, but Prime Minister May remained under intense pressure amid calls for her to resign and uncertainty remained extremely high. GBP/USD settled around 1.3140 with GBP/EUR around 1.1500 and further choppy trading is inevitable.
|08:15||Markit Mfg PMI(MAR)||51.5||51.5|
|08:15||Markit Serv PMI(MAR)||50.7||50.2|
|08:30||EUR German PMI Composite(MAR)||52.7||52.8|
|08:30||EUR German Manufacturing PMI (M/M)(MAR)||48.1||47.6|
|08:30||EUR German PMI Services(MAR)||54.8||55.3|
|09:00||Euro-Zone PMI Manufacturing(MAR)||49.5||49.3|
|09:00||Euro-Zone PMI Composite(MAR)||52||51.9|
|09:00||Euro-Zone PMI Services(MAR)||52.7||52.8|
|09:30||GBP Public Sector Net Borrowing(FEB)||-0.30B||-15.76B|
|12:30||CAD CPI (M/M)(FEB)||0.50%||0.10%|
|12:30||CAD CPI (Y/Y)(FEB)||1.40%||1.40%|
|12:30||Bank of Canada Core CPI (M/M)(FEB)||-||0.30%|
|12:30||Bank of Canada Core CPI (Y/Y)(FEB)||-||1.50%|
|12:30||CAD Retail Sales Ex Autos (M/M)(JAN)||-||-0.50%|
|12:30||CAD Retail Sales (M/M)(JAN)||-||-0.10%|
|13:45||USD Markit Services PMI(MAR)||56.2||56|
|13:45||USD Manufacturing PMI(MAR)||53.5||00:00|
|14:00||USD Existing Home Sales(FEB)||5.10M||4.94M|
|14:00||USD Existing Home Sales Change(FEB)||2.20%||-1.20%|
|14:00||USD Wholesale Inventories(JAN 12)||-||1.10%|
|18:00||Monthly Budget Statement(FEB)||25.0B||9.0B|