The Dollar is ending the week on a slightly stronger note, despite mixed labour market data for March. While a back-on-trend and slightly stronger-than-expected 196,000 jobs were created in the month, growth in average hourly earnings slowed to just 0.1% mom. EUR/USD has tipped back down to 1.12, USD/CHF has seemingly consolidated its position above parity but it is the move in GBP/USD which has been the most notable. The cross is back down to 1.30 – the weak end of a 4-week range – following Prime Minister May’s announcement that she had asked the EU for a further delay to Article 50, this time to 30th June.
The European Council is expected to give its formal response at a meeting on 10th April and there are reports that Donald Tusk is looking to offer a more flexible,12-month extension which would allow the UK to exit the EU at any point during this timeframe. Sterling’s reaction suggests that markets are concerned that should the EU refuse Theresa May’s demand for a time-extension, the UK would remain on track to leave the EU – potentially without a deal – on 12th April. Once again the can has been kicked down the road and uncertainty remains the buzzword for a Brexit saga that is seemingly no closer to being resolved.
