Investing.com — Foreign exchange markets have started the week quietly in Europe, with both the major European currencies in holding patterns ahead of a crucial week for Brexit, while the dollar is still drifting as it waits for hard news of trade deal between the U.S. and China.
The European Union has to decide at a summit on Wednesday whether it’s willing to push back the deadline for the U.K.’s departure beyond the default date of Friday.
Expectations are that the EU will offer some sort of extension, not least in order to avoid triggering a hard ‘no-deal Brexit’ that would badly disrupt the Irish economy. But French President Emmanuel Macron signalled he wanted tough political conditions for an extension, in order to be sure that the U.K. wouldn’t disrupt the EU’s agenda as it prepares to leave.
At 04:20 AM ET (0820 GMT), was at $1.3050, up 0.1% from late Friday in Europe, while it was also at 1.1627 against the , effectively unchanged. The euro was at $1.1225, not far above the lows of last week, unmoved by weaker-than-expected that rounded off a miserable February for the eurozone’s largest economy.
The , which measures the greenback against a basket of six major currencies, was at 96.910, supported still by a broadly positive U.S. on Friday that showed a sharp bounce in hiring and a modest easing of wage inflation.
The report added to the belief that the won’t raise interest rates this year and may even cut them, not least because of the increasing political pressure on the Fed from President Donald Trump.
However, some still feel a rate cut is too much to expect.
“The data coming out of the U.S. are quite reassuring,” Isabelle Mateos y Lago, chief multi-asset strategist with the Blackrock Investment Institute, told Bloomberg TV. She added that she thought the Fed would stay “on pause throughout the end of the year at least.”
Elsewhere, the remains under pressure amid signs of increasing tension between the country and the U.S. over its decision to buy Russian air defense systems. The U.S. has halted deliveries of equipment related to Ankara’s order for the F-35 fighter in response.
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