Sterling rises after Eurosceptic MP readies to back May’s deal
The sterling rose today after a major critic of Theresa May’s deal signaled that he could back the proposal. In an interview, Jacob Rees-Mogg said that he was open to vote for the deal, which was better than staying in the EU. This was major news because Rees-Mogg leads the European Research Group, whose members have contributed to the rejection of May’s proposal. This was a sudden change from a person who once tried to impeach the prime minister and one who has advocated for leaving without a deal. This change of heart means that May could get a deal passed by parliament after all. In the interview, he said:
The prime minister does not want to leave without a deal, the cabinet doesn’t want to leave without a deal and the British parliament doesn’t want to leave without a deal. It is therefore very difficult to see how you get to leaving without a deal.
The kiwi was little changed ahead of the interest rates decision by the New Zealand’s central bank. The bank is expected to leave rates unchanged at the current 1.75% where they have been since November 2016. The decision comes a few hours after the statistics office released trade data that were better than expected. The numbers showed that in February, exports increased to N$4.82 billion while imports declined to N$4.80 billion. The trade surplus increased to N$12 million. These numbers could make the central bank turn hawkish and signal when it will hike again.
The USD was little changed against many peers after disappointing housing numbers. In February, the building permits declined by 1.6% to 1.296 million. This decline was higher than the expected 1.320 million. The housing starts declined by minus 8.7%, which was worse than the expected minus 0.8%. The numbers stood at 1.162 million, worse than the expected 1.213 million. At the same time, the house price index rose slightly by 0.6%, which was better than the expected 0.4%.
Yesterday, the EUR/USD pair declined sharply to a low of 1.1270. In the Asian and European sessions today, the pair tried to recover some of the losses. At the start of the American session, the pair dropped close to yesterday’s lows. On the hourly chart, the price is slightly above the 38.2% Fibonacci Retracement level. It is also slightly below the 25-day and 50-day moving averages. The pair could break yesterday’s support and head to the 23.6% Fibonacci level of 1.1240.
The GBP/USD pair rose slightly after Theresa May appeared to gain support from a major Eurosceptic MP. It reached a high of 1.3265 and then pared some of those gains. On the four-hour chart, the pair is slightly above the 23.6% Fibonacci level and recently it has been consolidating as traders wait for the solution on Brexit. At these levels, the pair could move in either direction.
The NZD/USD pair moved slightly higher ahead of the interest rates decision by the RBNZ. In the four-hour chart, the pair has been making higher highs for the past few days. This is confirmed by the Volumes indicator, where the four previous bars have been moving higher. The price is also above the 50-day and 100-day moving averages. The pair could continue moving up in expectation of a hawkish RBNZ.