From Anneken Tappe: The U.S. dollar built on the previous week’s losses on Monday, losing ground against major rivals as traders look ahead to the Federal Reserve’s March meeting on Wednesday.
The ICE U.S. Dollar Index DXY, +0.07% a measure of the currency against a basket of six major rivals, was down 0.1% at 96.521 early Monday. Last week, the popular gauge of the greenback recorded its worst week since early December with a 0.7% drop, according to FactSet.
The Federal Reserve’s Open Market Committee is expected to be the highlight of the dollar’s week on Wednesday. No change in interest rates is expected, but any forecasts on growth and rates will be closely watched when policymakers complete a two-day meeting.
In the U.K., where traders had been gearing up for yet another Brexit vote on Tuesday, the tables have turned. Speaker of the House of Commons John Bercow blocked the government’s motion to have lawmakers vote on the deal — which was rejected last week — again, saying the government couldn’t bring the same exact motion twice. A previous version of the deal was rejected in January.
“The Parliament’s speaker has crushed Theresa May’s hope of bringing the same deal back for a vote. Sterling dropped like a rock on the back of this outcome. Basically, we have more uncertainty in the market, now the government will have to come back with substantial changes (which is literally impossible) in relation to the deal otherwise it means a prolonged delay,” said Naeem Aslam, chief market analyst at TF Global Markets, in emailed comments.
The British pound GBPUSD, -0.4890% slipped to a session-low of $1.3184 in response. It bounced back some and last traded at $1.3234, compared with $1.3242. One euro EURGBP, +0.4811% bought £0.8570, up 0.6%.
The U.K. is scheduled to leave the European Union on March 29. So far no trade deal with Brussels is in place, but Parliament has also ruled out to leave without a deal, leaving a request of an extension most likely. The parliamentary votes are not legally binding. All 27 EU member states have to agree on the extension before it becomes official.
The Bank of England is, meanwhile, due to meet on Thursday.
On the European continent, the eurozone’s trade surplus grew by ?1.5 billion in January, more than expected in part due to increased sales to the U.S., leading the euro EURUSD, +0.0177% higher.
The shared currency last bought $1.1340, versus $1.1307 late Friday.
The Invesco DB US Dollar Index Bullish Fund (UUP) was trading at $25.80 per share on Monday afternoon, down $0.00 (0.00%). Year-to-date, UUP has gained 7.37%, versus a 6.12% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of MarketWatch.
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