Article Highlights

  • Risk appetite returns on strong U.S. data
  • GBP loses momentum as May signs Article 50 trigger
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With virtually no economic data printed during the Asian session, forex players mostly traded the previous session’s developments…before taking them back by the end of the session.

Major Events:

Comeback for risk-taking – Looks like the “Trump trade” is still on like Donkey Kong! As I mentioned in my U.S. session recap, better-than-expected data from Uncle Sam helped traders move on from the recent failure of Trump’s healthcare bill to focus on economic recovery.

It also didn’t hurt that Fed’s Vice Chairman Stanley Fischer said in an interview that two more rate hikes in 2017 sounds “about right.” And with no economic report printed during the Asian session, forex players mostly just played along with the previous session’s theme.

Nikkei, which got weighed down by traders dumping their post-ex-dividend stocks plays, slipped by 0.15%. The tides were more favorable for the Shanghai index (+0.14%), Hang Seng (+0.20%), and Australia’s A SX 200 (+0.89%).

B-Day for Britain – The pound couldn’t sit at the cool table with the rest of the higher-yielding currencies today after British PM Theresa May has penned her letter to the EU which officially triggers Article 50.

Word around the hood is that the letter will be delivered to Donald Tusk at 12:30 GMT, just 15 minutes Tusk’s scheduled press conference at 12:45 GMT.

While market players more or less know what May has written in her letter, the tone of Tusk’s (and May’s?) presser will likely set the pound’s intraday trend. For now though, Britain’s currency has sustained more losses as traders take out their pound trades ahead of the event.

Market Movers:

USD – Not even overall risk appetite was able to rain on the dollar’s parade! The low-yielding currency continued to clock in gains against its major counterparts after Uncle Sam printed strong economic reports.

EUR/USD is back down to 1.0816 after hitting a session high of 1.0827 while USD/JPY inched up by another 9 pips (+0.08%) to 111.23. USD/CAD is also up by 7 pips (+0.05%) to 1.3391 and NZD/USD is down by 2 pips (-0.03%) to .7007.

GBP – The British pound continued to slide lower across the board on uncertainty ahead of Theresa May formally delivering the letter to EU’s Donald Tusk.

GBP/USD plummeted by another 43 pips (-0.35%) to 1.2415, GBP/JPY is down by 35 pips (-0.25%) to 138.07, and EUR/GBP is up by 34 pips (+0.39%) to .8713.

Watch Out For:

  • 12:45 GMT: Donald Tusk to give a presser over Article 50 trigger

See also:

U.S. Session Recap
London Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

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