· The dollar eased against a basket of currencies on Friday while sterling gained slightly on news that Prime Minister Theresa May had bought a bit more time to resolve when and how Britain exits from the European Union.
Against a basket of six key rival currencies, the dollar slipped 0.2 percent to 96.314.
The index had risen three-quarters of a percent in the previous session after falling to a more than six-week low on Wednesday after the Federal Reserve said it had abandoned plans to raise interest rates this year.
· European Union leaders on Thursday gave May two weeks' reprieve, until April 12, before Britain could crash out of the bloc if lawmakers next week reject her Brexit plan for a third time.
If she wins the vote in parliament, May will have an extra two months, until May 22.
· Sterling rose a quarter of a percent to $1.3140. It had retraced sharp losses overnight, when it touched as low as $1.3004.
· EUR/USD is trading below 1.1350, falling sharply. German Manufacturing PMI plunged to 44.7 points, deep in contraction territory. Earlier, French PMIs all came out below 50. Euro-zone prospects are bleaker.
From a technical perspective, the pair's inability to capitalize on the post-FOMC bullish break through six-month-old descending trend-line and a failure near 50% Fibonacci retracement level of the 1.0341-1.2556 up-move now seems to suggest that the recent positive momentum might have already run out of steam. A sustained weakness back below the 1.1335-30 horizontal zone will further reinforce the expectations and prompt some fresh technical selling, dragging the pair back towards challenging the 1.1300 handle. A follow-through selling has the potential to extend the downfall further towards 1.1260-55 intermediate support en-route the 1.1200round figure mark.
· The USD/JPY recovery from the post-FOMC sell-off fizzled near 110.90 region , as S&P 500 futures turn negative amid souring risk sentiment while ongoing weakness in Treasury yields also added to the renewed weakness in the spot.
Valeria Bednarik, Chief Analyst at FXStreet explained that the pair recovered up to 110.95 in the US session, and the 4 hours chart shows that it was unable to recover ground above its 200 SMA, overall retaining its bearish stance, as, in the same chart, technical indicators lost upward momentum within negative levels after correcting extreme oversold conditions:
"The pair could extend its advance once above 111.00, particularly if Asian equities follow the lead of the US ones. Still, and in the wider perspective, the risk remains skewed to the downside, only changing to bullish if the price surpasses 112.13, the yearly high."
· The U.S. Federal Reserve on Wednesday kept interest rates unchanged and slashed all projections of a rate hike this year.
Still, according to U.S.-based financial services giant S&P Global Ratings, the Fed is "not yet done" with rate hikes. Its chief Asia-Pacific economist told CNBC he thinks another increase may come sometime this year or early next year.
The latest decision to keep interest rates steady is "good news" for economies in the Asia Pacific region, Roache said.
With slowing global trade growth, Asian and other emerging markets will need to rely on domestic demand, which requires investment, he added.
"Investment typically means a wider current account deficit for these countries, and investment is also sensitive to interest rates," Roache explained.
"On both counts, lower U.S. rates really helps these economies because it means they can run larger current account deficits, they can keep investment rates quite high," he said. "That's going to be very helpful for these economies that will be suffering, probably from slowing export growth as we go through this year."
· European Union leaders have given Prime Minister Theresa May two weeks’ reprieve, until April 12, before Britain could lurch out of the EU if she fails to persuade MPs to back the withdrawal treaty she concluded with Brussels.
May had wanted to be able to delay Britain’s departure until June 30 to tie up legislative loose ends, and tried to reassure the EU that she could overturn two heavy defeats to clinch a last-gasp parliamentary ratification of her deal next week, so allowing a status-quo transition period to come into effect.
· Singapore’s annual headline inflation rate is expected to have risen 0.5 percent in February, according to a Reuters poll, quickening slightly compared with the previous month.
The annual all-items inflation rate was 0.4 percent in January.
A deflation in transport costs may have eased in February as both oil prices and vehicle quota premiums were higher on a month-on-month basis, said Jonathan Koh, an economist with Standard Chartered. Food prices could also rise due to festive spending during the Lunar New Year.
· CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices stalled ahead of resistance marked by the 38.2% Fibonacci expansion at 60.45. Breaking above this barrier initially exposes the 50% level at 62.28, though the more defining upside threshold is a bit further ahead in the 63.59-64.43 area. Alternatively, a reversal back below the 50% Fib retracement at 59.63 puts the 57.24-88 zone back into focus.
· Oil prices eased from 2019 peaks on Friday as economic growth concerns weighed on sentiment, pausing a three-month rally driven by OPEC-led supply cuts and U.S. sanctions against Iran and Venezuela.
Brent crude oil futures were at $67.72 per barrel at 0419 GMT, down 14 cents, or 0.2 percent, from their last close. Brent hit a four-month high of $68.69 per barrel the day before.
U.S. West Texas Intermediate (WTI) futures were at $59.84 per barrel, down 14 cents, or 0.2 percent from their last settlement. WTI also hit a 2019 peak at $60.39 the previous day.
"Global economic growth still remains a concern," said Sukrit Vijayakar, director of energy consultancy Trifecta.
Economic growth has slowed across Asia, Europe and North America, potentially denting fuel consumption.
Reference: CNBC, Reuters, DailyFX
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