Entering into US session, Sterling just shoots up sharply in the last hour and is now trading as the strongest one for the day. There is no apparent trigger or Brexit headline flowing through. Some pointed to a transcript of EU chief negotiator Michel Barnier at the UK House of Commons, where he mentioned that EU is “open to discussing other backstops” regarding the Irish order, as a trigger. But we’d say, if that document is the cause of the rally, then it’s more likely that Barnier said “no-deal scenario is not our scenario; it is not my scenario.”
But anyway, GBP/USD is now set to take on 1.3042 resistance with today’s strong rally. Meanwhile, EUR/GBP’s break of 0.8937 support and the near term channel is an indication of bearish reversal.
Canadian Dollar is following as the second strongest, as it was boosted after BoC Senior Deputy Governor Carolyn Wilkins yesterday suggested that BoC is still on course for further rate hikes despite uncertainty of NAFTA negotiations.
Dollar is the third strongest for the day. Markets await US and Canada employment data.
For now, Australian Dollar and New Zealand Dollar are the weakest ones, joined by Euro thanks to EUR/GBP selloff.
In other markets, major European indices are in red today, with FTSE down -0.9% at the time of writing, DAX down -0.21% and CAC down -0.18%. Asian markets ended mixed, with Nikkei down -0.8% and Singapore Strait Times down -0.42%. But China Shanghai SSE reversed earlier losses and ended up 0.40%. Hong Kong HSI just lost -0.01%. That’s a reason why Yen pared back some of the earlier gains.
