Daily FX Trading Update: Brexit Fears Drag GBP Down – Feb. 23, 2016

Daily FX Trading Update: Brexit Fears Drag GBP Down - Feb. 23, 2016
The US dollar gave up ground against the commodity currencies and the yen but advanced to the euro and pound. The US flash manufacturing PMI came in weaker than expected, falling from 52.4 to 51.0, worse than the projected dip to 52.3. US existing home sales and CB consumer confidence data are up for release today and another round of downbeat data could spur more dollar weakness.
The euro was also in a weak spot as Brexit fears influenced demand for the shared currency. PMI readings from the euro zone also came in mostly weaker than expected, with only the French flash manufacturing PMI beating the consensus. The German Ifo business climate index is up for release today and a drop from 107.3 to 107.0 is eyed.
The pound was the weakest currency of the bunch as Brexit concerns brought more uncertainty. As it turns out, Cameron’s EU deal failed to draw support from his business advisory group and even the mayor of London himself. For today, the Inflation Report hearings are scheduled, although Brexit headlines might continue to influence pound price action.
The franc advanced to the euro but gave up ground to the dollar when Swiss data disappointed. The PPI showed a 0.4% fall in producer prices, worse than the projected 0.2% decline. SNB head Thomas Jordan is set to give a testimony today and jawboning might drive the franc lower.
The yen took advantage of the selloff among European currencies, as talks of an RRR cut in China also supported demand for the safe-haven Asian currency. Data was actually weaker than expected, as the flash manufacturing PMI slid from 52.3 to 50.2 versus the projected 52.0 figure.
Commodity Currencies (AUD, NZD, CAD)
The comdolls carried on with their strong rebound, particularly against European currencies. Data has been mixed, with New Zealand reporting an 8.9% jump in credit card spending and Australia showing a 0.2% drop in its CB leading index. There are no reports due from the comdoll economies today.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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