A Brexit deal has been agreed in principle and now it needs to be approved by the 27 EU member states and the UK parliament. Optimism returned to the markets on the Brexit news and comments from China saying it hoped to reach phased trade agreement with the US as early as possible. Commodity currencies rallied on the news, safe haven currencies weakened and US$ remains at 1month lows. A number of US data releases today including initial jobless claims could impact US$ direction today.
Oil prices remained under pressure as analysts estimated US crude inventories rose significantly last week. Despite the weakening oil prices, C$ rallied on positive the trade news and the proposed Brexit deal. If the current momentum continues, C$ could strengthen to 1.3130 (mid Sep19 lows) and possibly extend to 1.3010 (mid-July19 lows).
The announcement that the UK and the EU reached an initial Brexit agreement boosted Euro vs US$, allowing the currency to breach the key 1.11. Today’s US$ data releases will be watch closely for direction, but the current momentum should favor Euro today.
GBP initially surged 1% and UK equity markets rallied on the announcement of an initial Brexit agreement between the UK and EU. The first response from the Irish DUP and Scottish SNP has been to opposed the new Brexit agreement. The UK PM is now seeking an extraordinary session of parliament on Saturday to gain Brexit approval. No deal as been signed yet, so the potential of further volatility remains high. 14 Days to Brexit deadline.