Pound Falls to a Two-Week Low, Brussels/BOE in Focus

Daily Report February 7, 2019

GBP
The British pound tumbled to a two-week low against the United States dollar as market participants await Brexit developments and the Bank of England meeting. Theresa May headed to Brussels to seek changes to the backstop to save her deal. However, her chances of reaching her goal are too low, especially that the European leaders were clear that the current deal will not be renegotiated. On the other hand, market participants widely expect the Bank of England to leave monetary policy unchanged and address the risks of a disorderly Brexit. The GBPUSD is trading near $1.29, and the GBPJPY dropped to 141.80.
 

USD
The Dollar Index which measures the greenback against a basket of major currencies finished higher for the fifth consecutive day at 96.38. The Federal Reserve Chairman Jerome Powell reassured that the US economy is in a good place. The ongoing Brexit uncertainty and the soft economic data from the Eurozone are providing support to the US dollar against peers. The USDJPY is hovering near a five-week high of 110, and the EURUSD dropped to a low of $1.1345.
 

Metals
Metals prices drifted lower as the dollar rallied higher. The gold ounce declined to a one-week low of $1303, the silver ounce tumbled to $15.63, and palladium dropped to $1368.
 

Oil
Oil prices bounced off a one-week low supported by the ongoing turmoil in Venezuela and Energy Information Administration Data. The data showed that the weekly crude inventories rose by only 1.263 million barrels versus an expectation of 2.179 million barrels, while the US production remained at a record high of 11.9 million barrels per day. The West Texas Intermediate crude futures traded near $53.60, and the Brent futures traded near $62.20.
 

Major Economic Events