The US dollar maintained a firm tone after last week’s data while major alternatives also failed to garner significant support.

The US dollar maintained a firm tone after last week’s data while major alternatives also failed to garner significant support.

The Euro was again hampered by growth concerns as political uncertainty continued to hamper Sterling.

Oil prices were marked by high volatility with limited net gains amid hopes for tightening supplies while precious metals found solid support on dips.

The Australian dollar rallied after the Reserve Bank statement was less dovish than expected.

Global equity markets were little changed overall as the lunar new-year holidays stifled activity once again.

The UK January PMI construction index declined to a 10-month low of 50.8 from 52.8 and well below consensus forecasts. Political uncertainty undermined commercial activity, although companies were still optimistic over the 2019 outlook.

There were on-going discussions between Conservative MPs to find a compromise proposal. EU officials maintained their tough stance with German Chancellor Merkel remarking that she did not want to re-open the Withdrawal Agreement and there was no support for the UK position from the Irish government while EU Chief Negotiator Barnier offered legal guarantees on the backstop.

Sterling was hampered by rate expectations with futures markets suggesting that the chances of a further rate hike by December had declined to around 55% from 60% last week. The UK currency briefly spiked in US trading, but GBP/USD failed to hold 1.3100 while GBP/EUR found support below 1.1380 in choppy conditions.

BRC data recorded a 1.8% annual increase in like-for-like sales from -0.7% previously and Barclaycard also reported stronger sales for the latest month, although there was no Sterling response and GBP/USD was held below 1.3050 on Tuesday with markets expecting a weak PMI services report.

Economic Calendar

Expected Previous
08:50 Markit Serv PMI(JAN) 47.5 47.5
08:55 EUR German PMI Services(JAN) 53.1 53.1
09:00 Euro-Zone PMI Composite(JAN) 50.7 50.7
09:00 Euro-Zone PMI Services(JAN) 50.8 50.8
09:30 GBP PMI Services(JAN) 51 51.2
10:00 Euro - Zone Retail Sales (Y/Y)(DEC, 2018) 0.50% 1.10%
10:00 Euro - Zone Retail Sales (M/M)(DEC, 2018) -1.60% 0.60%
13:30 CAD Trade Balance(DEC, 2018) - -2.06B
14:45 USD Markit Services PMI(JAN) 54.2 54.2
14:45 USD Markit PMI Composite(JAN) 54.5 54.5
15:00 USD ISM Non-Manufacturing PMI(JAN) 57 58

*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.