Pound Rallies Amid Increase In Risk Appetite

March 15, 2019
Pound Rallies Amid Increase In Risk Appetite March 18, 2019 Lennox Hamilton

As Brexit-related concerns abated and speculators stayed confident for a US-China trade deal, the pound jumped against its key rivals in the European session on Friday in the midst of risk appetite.

UK legislators okayed a motion to pause the EU exit process by a minimum of three months, but strongly denied a second referendum call.

Prime Minister Theresa May said that if MPs backed her exit agreement in a vote next week, Brexit could be postponed by three months to June 30. If they dismiss her agreement again, then she’ll probably be looking for a significantly longer postponement. And that the rest of the 27 EU member states must concur on any delay.

EU lawmakers meet next Thursday to look into the request to delay of Brexit. In the Asian session, the currency traded slightly lower versus its key competitors. The pound reversed from a 2-day low of 1.3233 observed at 3:45 am ET to 1.3333 versus the Swiss franc. The currency pair is expected to face resistance around the region of 1.35. After recording a 2-day rock-bottom level of 1.3203 recorded at 3:45 am ET, the pound climbed back against the greenback and recorded a level of 1.3278. The pound may see some sell off at 1.34 where the next technical resistance exists.

After sliding to 147.42 at 3:45 am ET, the pound inched up to 148.29 against the yen. The pound may face selling pressure around the region of 150.00. As expected, the Bank of Japan held its monetary policy unaltered. The board maintained the interest rate of -0.1% on current accounts held by financial institutions in banks. The pound reversed from a prior 48hr low of 0.8575 against the euro, with the pair trading at 0.8539. The currency pair may see resistance around 0.84.

Eurostat figures indicated that in February consumer prices in the Eurozone accelerated as anticipated, while core price increase fell. Harmonized inflation increased from 1.4% in January to 1.5%.

Canada’s prevailing February home sales and January manufacturing sales, as well as the March manufacturing survey of the New York Fed, the February U.S. industrial production, and the March preliminary consumer sentiment index of the University of Michigan are slated for press release in the New York session.

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