UK Preliminary Quarterly GDP is out on Thursday at 09:00 MT time.
UK currency is at 7-month minimum ahead of Brexit vote
On Wednesday, the UK currency approached a seven month minimum because Prime Minister Theresa May’s government had another crucial vote on Brexit.
The currency pair GBP/USD reached a minimum of 1.3148. This value hasn’t been observed since November 16.
The British Parliament had the EU withdrawal bill passed. That’s the British government’s key piece of Brexit set of laws.
The main UK currency was almost intact versus the common currency. The currency pair EUR/GBP demonstrated an outcome of 0.8789.
Market sentiment was still cautious due to the fact that concerns as for a heated trade clash between China and America continued.
Worries as for trade clashes mounted on Tuesday right after the Chinese government warned that it would fight back after American leader Donald Trump had threatened to have a 10% duty imposed on $200 billion of China’s goods.
The moves backed worries among market participants that the world’s two leading economies could be involved in another fierce trade conflict.
It’s apparent that uncertainty as for the future of the North American Free Trade Agreement as well as worries as for duties that the Trump administration has put on EU trading partners also contributed to investors’ anxiety.
The USD index, employed to evaluate the greenback’s strength against several key currencies, jumped by 0.17% trading at 94.81, which is not far from Friday’s eleven-month maximum of 95.13.
The evergreen buck ascended versus the Japanese yen. The currency pair USD/JPY rallied to 110.12, drifting away from Tuesday’s more than one-week minimum of 109.54.
The Japanese currency is what traders often look for in times of geopolitical tensions as well as market turmoil.
The common currency remained lower versus the evergreen buck, the currency pair EUR/USD diving by 0.2% hitting 1.1565 a day after ECB Governor Mario Draghi told that the major bank’s monetary policy is going to remain prudent, persistent as well as patient in the wake of the ECB’s dovish view on interest rates the previous week.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.