[vc_row][vc_column][vc_column_text]As the last week’s raft of parliamentary votes saw the odds of a no-deal Brexit decline this helped the pound to make fresh gains against its rivals, in spite of an ongoing sense of political uncertainty.

Confidence in the euro, meanwhile, eased as the latest German inflation data saw a surprise downward revision.

With the US economy still showing signs of weakness, in spite of improved consumer confidence, the US dollar struggled to find traction against its rivals.

Even so, the New Zealand dollar came under pressure as February’s food price index failed to impress, raising the risk of Reserve Bank of New Zealand (RBNZ) dovishness.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

Lower odds of no-deal Brexit benefit pound

After MPs voted to rule out the prospect of a no-deal Brexit this encouraged the pound to push higher across the board, in spite of a continued lack of clarity over the ultimate outcome of the process.

Investors reacted with relief to news that the threat of seeking a no-deal Brexit had been taken off the table, allowing GBP exchange rates to make bullish gains.

However, this sense of optimism ultimately proved short-lived thanks the continued lack of an agreed exit deal.

While Theresa May attempted to shore up fresh support for her already rejected Brexit deal this failed to encourage any real positivity among investors.

In the absence of any supportive domestic data the Pound soon came under renewed pressure, trending lower against its rivals on Monday morning.

Although market focus looks set to remain centred on any fresh Brexit developments GBP exchange rates could find support on the latest consumer price index data.

Even if inflation shows signs of picking up, however, any dovish comments from the Bank of England (BoE) policy announcement on Thursday could drive the Pound lower once again.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

Euro falters on prospect of continued ECB dovishness

A downward revision to February’s finalised German consumer price index data weighed heavily on the euro, with the weaker showing giving the European Central Bank (ECB) greater incentive to leave interest rates on hold.

As inflation within the Eurozone continued to show signs of weakness this left the single currency on a weaker footing against its rivals.

Investors were also disappointed by underwhelming German trade data, which saw export volumes stagnate in January.

With the US-China trade spat looking unlikely to see a resolution any time soon the prospect of a continued slowdown in global trade does not bode well for the outlook of the German economy.

Even so, as the latest Eurozone industrial production figures bettered forecast this helped to limit the downside exposure of EUR exchange rates for the time being.

Another set of negative readings from the ZEW economic sentiment surveys could give investors fresh incentive to sell out of the euro.

EUR exchange rates also look vulnerable to selling pressure if the ECB’s Economic Bulletin paints a negative picture of the Eurozone’s outlook, particularly if the odds of further monetary loosening appear to increase.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

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