Dollar lower on broad-based long liquidation, sterling hits 5-1/2 month highs ahead of Saturday's Brexit vote

Market Review - 19/10/2019  03:03GMT  

Dollar lower on broad-based long liquidation, sterling hits 5-1/2 month highs ahead of Saturday's Brexit vote

The greenback ended lower against majority of its peers as a drop in U.S. yields and stocks triggered broad-based weakness. Sterling climbed steadily to 5-1/2 month highs on short covering at the close ahead of Saturday's vote, where UK's Parliament will vote on PM Johnson's Brexit deal.  
  
Versus the Japanese yen, dollar met renewed selling at 108.58 in Asian morning and retreated to 108.52 ahead of European open. The pair rebounded to 108.72 in European morning before dropping to a session lows of 108.40 at New York midday due partly to falling U.S. yields, price last traded at 108.42 near the close.  
  
Although the single currency retreated to 1.1115 shortly after Euroean open on cross-selling of euro especially vs sterling, price erased its losses and climbed steasdily in tandem with sterling on broad-based usd's weakness, price later fresh 6-week high of 1.1172 ahead of New York close.  
  
The British pound met renewed selling at 1.2891 in Australia after Thursday's rebound from 1.2759 and dropped to session lows at 1.2840 ahead of European open on concerns whether the Brexit deal will get through the British Parliament's vote on Saturday. However, cable erased its losses and climbed steadily in Europe and NY session to a fresh 5-1/2 month high of 1.2990 (Reuters) at the close due to active short covering ahead of Saturday's parliamentary vote on Brexit.  
  
In other news, Reuters reported Saturday's parliamentary vote on Prime Minister Boris Johnson's Brexit deal will be "pretty close" but likely just fall short, John McDonnell, the opposition Labour party's finance spokesman said on Friday.  Johnson faces a Brexit showdown with parliament on Saturday after clinching a last-minute divorce deal with the European Union that his Northern Irish allies and opposition parties oppose.  "I don't believe it will pass, I think it will be defeated but...the numbers are going to be pretty close," McDonnell told Sky News.  
  
Data to be released this week :  
  
UK rightmove house price, Japan exports, imports, trade balance, all industry activity index, China China house prices and Germany producer prices on Monday.  
  
UK PSNB GBP, PSNCR GBP, CBI trends orders, Canada retail sales and U.S. redbook, existing home sales, rich Fed services index on Tuesday.  
  
New Zealand imports, exports, trade balance, France climate, UK BBA mortgage application, U.S. MBA mortgage application, housing price index , Canada wholesale trade and EU consumer confidence on Wednesday.  
  
Australia manufacturing PMI, services PMI, Japan indicator, France manufacturing PMI, services PMI, Germany manufacturing PMI, services PMI, UK finance mortgage application, EU manufacturing PMI, services PMI, ECB refinancing rate, ECB deposit rate and U.S. build permit, durable goods, durable ex-transport, durable ex-defense, initial jobless claims, manufacturing PMI, services PMI, new home sales, KC Fed manufacturing on Thursday.  
  
Germany Gfk consumer sentiment, Ifo business climate, Ifo current conditions, Ifo expectations, France producer prices, Italy trade balance, U.S. Michigan consumer sentiment, UK CBI distributive trades survey and Canada budget balance on Friday.