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08.02.201910:32 Forex Analysis & Reviews: Review of the foreign exchange market on 08.02.2019

Revisione a lungo termine
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It feels like Theresa May flew to Brussels for breakfast, as for them the hospitable Jean-Claude Juncker fed her. Of course, the head of the European Commission promised to make adjustments to the political declaration of intent, which outlines the common and rather vague contours of interaction between the European Union and the United Kingdom after Brexit, in order to take into account a number of concerns of the British parliament. However, expressing regret for extremely tight deadlines, he explained that he would be able to submit amendments to the declaration only after the same parliament adopts the version of the agreement already agreed by the countries of the European Union, to which Europe will not make any changes. Stressing that there can be no talk of changing the agreement. In other words, Theresa May is once again invited to take a word and accept the agreement, which does not suit the UK very much, in the hope that later the European Union will deign to supplement it with those items that will take into account the national interests of the United Kingdom. True, the words that the European Union is ready to expand the number of formulations for a political declaration so strongly inspiring market participants that everything else they had not heard according to the reaction.

Exchange Rates 08.02.2019 analysis

Before the results of the intense meeting between Theresa May and Jean-Claude Juncker had a positive impact on the pound, Mark Carney made another attempt to weaken his position. Naturally, following the meeting of the Board of the Bank of England, the parameters of monetary policy remained unchanged, and everyone was looking forward to the speech of his head. The head of the regulator himself said that the risks associated with Brexit are extremely high, and so far there can be no question of raising the refinancing rate. Rather, we need to prepare for its possible reduction. Indeed, only with the most unfavorable developments and as if confirming the fears, the Bank of England once again lowered the forecast for economic growth rates, making it clear that it proceeds from the worst case scenario.

Exchange Rates 08.02.2019 analysis

However, although the American statistics did not justify the forecasts, it showed quite good results. Thus, the total number of applications for unemployment benefits decreased by 61 thousand compared to the forecast of 90 thousand. In particular, the number of initial applications decreased by 19 thousand and not by 32 thousand.

Today, any serious data is expected to come out neither in Europe nor in the United States. Hence, the market has a reason to consolidate because it's too early to talk about correction since there are no special reasons for joy in either pound or single European currency. True, some kind of diversity can influence regular statements regarding Brexit as Theresa May will hold a number of more meetings in Brussels today. True, they are of a purely technical and formal nature, and it is unlikely that their results will greatly affect investor sentiment. Therefore, the single European currency will remain in the region of 1.1325 - 1.1350.

Exchange Rates 08.02.2019 analysis

The pound will be around 1.2900 - 1.2975. Simply because the volatility of the pound is slightly higher than that of the single European currency.

Exchange Rates 08.02.2019 analysis

Eseguito da Mark Bom
Esperto analista di InstaForex
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