Asia Pacific Market Open – Brexit, British Pound, US Dollar, NZD/USD
- The British Pound still finished higher despite Brexit Article 50 extension doubts
- Option expiry may have boosted USD[1] Friday as the S&P 500[2] halted rising streak
- Asia stocks may consolidate as NZD/USD[3] faces key resistance, China trade due
We recently released our Q1 forecasts for currencies like the US Dollar in the DailyFX Trading Guides page[4]
The British Pound was arguably one of the more volatile majors on Friday, ultimately finishing the day higher on mixed Brexit news. Initially Sterling rallied on reports that an Article 50 extension could be in the cards[5], That notion was then downplayed by UK Prime Minister Theresa May’s spokeswoman who said that “it is government policy that this is not something we are going to do”.
GBP[6] still finished the day higher alongside the pro-risk Australian and New Zealand Dollars. Granted this was largely thanks to the ‘risk on’ market dynamic during the first half of the trading session. Fed Chair Jerome Powell continued to offer a cautious outlook on monetary policy, leading to gains in Asia Pacific benchmark stock indexes as expected[7].
As demand waned for safety, the US Dollar[8] weakened and an in-line inflation report failed to offer much upside momentum. Then, the greenback trimmed losses and an obvious catalyst seemed absent. Gains may have been due to geopolitical concerns or perhaps more likely, options expiry[9]. The caution in sentiment due to the former may have led to the S&P
