Following the unexpected decision from Germany that they are planning to increase spending, this provided some much-needed respite for the Euro in which triggered a sell off in the Pound and the Euro took advantage of this weakness, in turn reducing the recent loses and somewhat fighting back GBP’s previous advances.
Currently the market is at a level which essentially could have two outcomes, the Euro continues to make headway or the sell off eases and this poses an opportunity for GBP buyers. Analysts from Investment banks have suggested the Euro may have been oversold and the recent gains could be short lived and see a reversal in the market.
The US is yet to implement tariffs on the EU which still imposes near term risk to the Euro. Trump gave an extension to April before finalsing and announcing tariff terms but has followed through on the tariffs for Mexico, Canada and China has shown that he means business.
US data out on Friday was mixed with the main Non-Farm Payroll print coming in lower than markets expectations giving no immediate let up on the continued weakening of the Dollar. This has now opened the doors for a potential three further rate cuts from the Federal Reserve, pressure has increased for the FED to speed up and face growing economical uncertainty. Although pressure is mounting, the February print doesn’t show enough for any drastic changes to take place however eyes will firmly be on March’s print.
This weeks outlook is data heavy with the US taking center stage with inflation prints being the main focus.
Canada has elected a new President, Mark Carney who was once the Governor of the Bank of England. Winning the election by over 80% of the votes it seems the Canadians have taken into consideration his approach to crisis management, guiding Canada through 2008 crisis and the UK through the Brexit Saga.
Item one on the agenda will to see how to ease trade tensions with Trump.
-Oakleigh Exchange Partners-