British Pound Steady as Brexit-Inspired Selloff Fizzles
- British Pound recovers as losses triggered by Brexit trigger fizzle
- Euro may look past first decline in German inflation in 11 months
- US Dollar volatility unlikely on 4Q GDP revision, Fed comments
The British Pound corrected gently higher in Asian trade following yesterday’s losses. The currency fell as the UK government invoked Article 50 of the Treaty of Lisbon, formally launching the Brexit process. Follow-through proved limited however, as expected. Sterling spiked to a two-month low against its major counterparts but promptly recovered, erasing the lion’s share of intraday losses.
German CPI data headlines the economic calendar in European hours. The benchmark year-on-year inflation rate is expected to edge down to 1.8 percent in March from 2.2 percent in February, marking the first downtick in 11 months. The outcome may mean relatively little for the Euro however considering its limited implications for near-term changes in ECB monetary policy.
Later in the day, a revised set of fourth-quarter US GDP figures enters the spotlight. An upgrade in the annualized growth rate is expected to take it from 1.9 to 2 percent, but this is probably too small of an improvement to re-energize Fed rate hike speculation in earnest (absent a dramatic deviation from expectations, of course). That will probably leave the US Dollar in digestion mode.
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** All times listed in GMT. See the full DailyFX economic calendar here.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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