Despite optimism that a Brexit deal would eventually be approved, there were further concerns that delays would continue to sap business confidence and investment.

The dollar continued to gain ground on Monday with an eighth successive daily gain and posted 2019 highs amid weak Euro sentiment. There was a slight correction on Tuesday.

Weak UK industrial production data and a lacklustre GDP report undermined Sterling with no major Brexit developments.

A tentative deal to avoid another US government shutdown boosted equity-market sentiment with measured net gains as markets monitored US-China trade developments.

Oil prices were hampered by persistent demand concerns and dollar strength.

US currency gains also curbed support for precious metals, although with solid support on dips.

According to provisional data, UK GDP increased 0.2% for the fourth quarter compared with consensus forecasts of 0.3% with the year-on-year rate at 1.3% from an upwardly-revised 1.6% previously and the lowest reading since 2012.

Industrial production data was notably weaker than expected with a 0.5% decline for December as manufacturing output fell 0.7% amid on-going weakness in the car sector. With business investment also registering a quarterly decline, near-term confidence in the economy remained weak with further concerns that political uncertainty would damage confidence and activity.

Despite optimism that a Brexit deal would eventually be approved, there were further concerns that delays would continue to sap business confidence and investment. EU Chief Negotiator Barnier stated that the Irish backstop is not the EU’s view of its future partnership and is just an insurance policy and also reiterated that the Withdrawal Agreement would not be re-opened.

GBP/EUR held firm around the 1.1400 area despite underlying vulnerability while GBP/USD dipped to lows below 1.2850 with only a slight recovery ahead of Prime Minister May’s statement later on Tuesday.

Economic Calendar

Expected Previous
08:00 German Buba President Weidmann speech - -
11:00 OPEC Meeting - -
13:00 BoE Gov Carney Speaks - -
15:00 USD JOLTs Job Openings(DEC, 2018) 7.063M 6.888M
17:45 USD FOMC Member Powell Speech - -
22:30 FOMC Member George Speaks - -
23:30 AUD Westpac Consumer Confidence(FEB) - -4.70%
23:30 FOMC Member Mester Speaks - -

*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.