The UK Prime Minister was given the go-ahead on Tuesday to pull the trigger on Article 50, which is the official document that signals the UK is leaving the European Union. British PM Theresa May said some months ago that she would trigger Article 50 before the end of March and it appears she will now do so. Also weighing on the Pound is the worry the Scots will demand another referendum on independence, which could drag on the UK economy.
Elsewhere in Europe, the Netherlands is gearing up to vote in a series of upcoming National elections, which has the potential to destabilize the Euro if unexpected outcomes occur. The Euro has been rallying strongly over the past week with the ECB rumored to be talking about raising official interest rates in the coming 12 months and tapering back the current stimulus program. Traders have begun to price in the likelihood of a higher Euro in the next 12 months. The chances of the Euro falling below parity against the US Dollar are diminishing.
The US Fed started its two-day meeting Tuesday and will conclude with its decision at 5am AEDST Thursday morning. The US Dollar was mostly higher Tuesday with better than expected Producer Prices giving the Fed even more reason to raise rates this week.
Looking ahead to today UK Unemployment data is set for release along with US Retail Sales and US CPI data ahead of the US Fed’s statement. Expect some serious volatility from 5am Sydney time Thursday morning and as I said yesterday everything else right now in the market is a sideshow until the Fed’s decision.
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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