High Risk FX Demand Fueled by Brexit Hopes
The US Dollar and Japanese Yen both fell during Tuesday trading on news of a Brexit negotiation breakthrough which led to FX traders ditching the “safe haven” currencies in favor of higher risk assets. Hours before the vote in the UK Parliament for the Prime Minister's Brexit proposal, and coupled with growing optimism over a US-China trade deal, sentiment has swung into high gear and pushed the Euro, as well as Aussie and Kiwi Dollars, higher against their rivals.
As reported at 10:27 am (GMT) in London, the EUR/USD was trading at $1.127, up 0.1849% and sliding off the earlier session peak of $1.12843 while the low was pegged at $1.12474. The AUD/USD was trading at $0.7075, up 0.0934%; wit the range for the pair recorded today at $0.70577 for the low and $0.70811 for the high. Meanwhile, the NZD/USD was higher at $0.6847 up 0.2401%, and ranged from $0.68270 to $0.68502.
US Inflation Data Also Eyed
Markets' focus will be on today's vote in Parliament, and though there is hope for a positive outcome, which analysts say could push the GBP/USD to as high as the $1.35 level, there is still great uncertainty as to whether Theresa May's efforts will be enough. Also happening today is the release of a slew of US economic data, including personal inflation which analysts have predicted will be flat for the period; CPI and Core CPI for February are expected to remain at 1.6% and 2.2%, respectively, on a year-over-year basis.