Brexit Uncertainty Exerted Pressure on Pound

Market Reviews

US dollar stays strong, boosted by strength in Treasury yield. US 10-year yield reached maximum 3.12%, today and is staying firm at around 3.1%. Today’s data showed, that US initial jobless claims grew by 11k to 222k in the week ended May 12, above forecast of 215k. Continuing claims fell by 87k to 1.71m in the week ended May 7, lowest since December 1, 1973. Philadelphia Fed Business outlook rose to 34.4 in May, up from 23.2, better than expectation of 21.1.

The British pound is trading with increased volatility today, while the GBP/USD pair was growing and falling under the influence of contradictory news on Brexit. Initially, it was reported on the readiness of the UK to remain in the EU customs union after 2021. However, later this news were refuted.

British Prime Minister Theresa May announced the withdrawal of Britain from the customs union, adding that the UK will discuss customs partnership. At the same time, May again reminded about new trade agreements and noted that the speech does not go about a tough border with Ireland.

The euro weakened against the US dollar, after it reached its lowest level since December 19 and overcame an important psychological mark of $1.80. The EUR/USD pair then recovered somewhat, but is now under pressure again, testing the $1.80 level.

Australia labor market added 22.6k in April (seasonally adjusted), slightly above forecast of 20.0k. Unemployment rate grew by 0.1% to 5.6%, above forecast of being unchanged at 5.5%. Full-time employment grew 32.7k while part-time jobs fell by 10k. Participation rate rose to a further record high of 65.6%.