GBPUSD, H4
After almost 9 months following the U.K.’s referendum on EU membership, UK government will finally invoke Article 50 of the Lisbon Treaty to formerly begin the provisional two-year negotiation period to agree on divorcing terms with the EU (Wednesday 29th).The U.K. will officially notify EU officials, who in turn will acknowledge the request, before tasking negotiators with drafting guidelines, which then will have to be agreed upon by the remaining EU members before talks can officially start. Things won’t happen quickly given, President of the EU Council, Tusk, said last week that members will hold a Brexit summit on April 29. PM May has said that she is prepared to call “no deal” and take Britain out of the EU without a deal if satisfactory terms cannot be agreed upon at the end of two years.
Still, it is interesting to see that even though Brexit comes into view this week that the drama over the ACA was ended on Friday, the fact that the healthcare bill was canceled appears to be the major driver of today’s rally. Cable hits 4-week high at 1.2600 and EURUSD traded above 4-months high (1.0900) topping so far at 1.0904, levels last seen since US election period (8th November 2016). The strong German Ifo data also helped that rally.
However, the biggest mover today out of the main currencies is USDJPY. The failure of the Trump administration to push through the healthcare reform bill, created demand for the safe haven yen. The pair is off its 110.10 low, which is the lowest level seen since early November.
Lastly tomorrow markets focuses again in US since Fedspeak and Consumer Sentiment will be the major events, with Fed’s Yellen speech. It is unlikely though to hear any fresh views on the FOMC’s rate trajectory, since Fed’s Yellen should remain cautious about giving away any hints on policy.
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Andria Pichidi
Market Analyst
HotForex
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