· The dollar pared gains again the Japanese yen and extended losses against the euro after U.S. consumer prices showed that inflation remains low despite a tight labor market, bolstering the Federal Reserve's case for keeping interest rates on hold.
The Consumer Price Index rose for the first time in four months in February, but the pace of the increase was modest, resulting in the smallest annual gain in nearly 2-1/2 years. The dollar index, which measures the greenback against a basket of six rivals, fell, and was last down 0.26 percent on the day to 96.96.
The euro was 0.42 percent stronger against the dollar, last priced at $1.1294. Against the Japanese yen, which like the dollar acts as a safe-haven investment in times of economic and political volatility, the dollar was 0.08 percent stronger at 111.28 yen, paring earlier gains. As the greenback rises in value, the number of yen required to buy one dollar increases.
· The pound stabilised in early Asian trade on Wednesday after turbulence following the defeat of Prime Minister Theresa May’s European Union exit deal, but investors braced for more volatility ahead of additional Brexit proceedings.
Sterling stood flat at $1.3064 and stuck to a narrow range. The currency had lost 0.65 percent the previous day, when it fluctuated widely between $1.3290 and $1.3005.
· The Brexit process could see yet more twists and turn this week following another defeat of Prime Minister Theresa May's withdrawal deal.
U.K. lawmakers rejected the deal again on Tuesday evening by 149 votes, despite some latch-minute assurances from the EU which May had achieved in Strasbourg earlier in the week.
The route forward is still extremely uncertain but May has already promised two more votes for the U.K. Parliament. On Wednesday and Thursday, respectively, lawmakers will get to vote on whether the U.K. should leave the 28-member bloc with no deal, or should request a delay to its departure — which is currently scheduled for March 29.
But her agreement was rejected by 149 votes after 242 MPs voted for the deal and 391 MPs voted against it. This was a smaller defeat than when it was rejected the first time, but the margin still remained significant. Speaking after the result, May said she regretted the decision taken by the House of Commons.
No-deal vote
The first vote on a no-deal scenario — where the U.K. crashes out of the bloc and has to rely on WTO trading rules — is highly likely to be rejected by politicians. However, it's not concrete and there's still a possibility the U.K. could leave without a deal, even if they vote against it.
May said after her loss Tuesday that a "no deal" remains the default unless a withdrawal agreement is ratified. Meanwhile, a spokesman for European Council President Donald Tusk said that the second rejection had "significantly increased" the risk of a damaging "no-deal" divorce, according to Reuters.
A vote to delay
If Wednesday's vote is rejected, lawmakers will vote Thursday evening on whether they want an extension to Article 50 — which is the formal two-year process governing Britain's departure from the European Union.
With only 17 days left until the Brexit deadline, it's possible that lawmakers could back this, although pro-Brexit MPs (Members of Parliament) worry that this could lead to a second referendum or no Brexit at all.
An extension to Article 50 also opens up the possibility of another general election in the U.K. if May, perhaps understandably, grows weary of the political stalemate in Westminster.
The U.K. leader sent a warning to lawmakers on Tuesday evening saying that voting against leaving without a deal and for an extension still doesn't solve the problem of Brexit.
"The EU will want to know what use we mean to make of such an extension," a hoarse-voiced May told lawmakers.
"This House (of Commons) will have to answer that question. Does it wish to revoke Article 50? Does it want to hold a second referendum? Or does it want to leave with a deal but not this deal?"
· Oil rose on Tuesday, supported by Saudi Arabia's plan for further voluntary supply curbs in April and by a cut in oil exports from Venezuela due to a power outage.
Saudi Arabia, seeking to drain a supply glut and support prices, plans in April to keep its oil output well below the level required of it as part of an OPEC-led supply cutting deal, a Saudi official said on Monday.
Brent crude, the global benchmark, rose by 12 cents to $66.70 a barrel. U.S. West Texas Intermediate crude added 8 cents to $56.87.
"This shows Saudi Arabia's resolve to keep the oil market balanced by keeping oil supply tight," said Carsten Fritsch, analyst at Commerzbank.
· Venezuelan congress head Juan Guaido is preparing a groundbreaking reversal of late President Hugo Chavez’s energy industry nationalization, allowing private companies a bigger role in its oilfields and shrinking state-run PDVSA, according to opposition advisers and a draft seen by Reuters.
“We need to change the current framework ... we need to open up the oil industry to private investment,” said Ricardo Hausmann, Guaido’s delegate to the Inter-American Development Bank. Speaking at an energy conference in Houston, Hausmann said that PDVSA’s role had to be limited due to its operational and financial weakness.
· Venezuela ordered American diplomats on Tuesday to leave within 72 hours after President Nicolas Maduro accused U.S. counterpart Donald Trump of cyber “sabotage” that plunged the South American country into its worst blackout on record.
Reference: CNBC, Reuters
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