The date to officially start the Brexit procedure was finally confirmed yesterday.
The UK Prime Minister, Theresa May, will trigger Article 50 of Lisbon treaty on March 29, starting the 2-year Brexit negotiation process with the EU. The timetable is in line with her plan.
Theresa May will formally notify the EU Council President, Donald Tusk, with a letter next Wednesday. Tusk is expected to present draft Brexit guidelines to EU 27 member states, within 48 hours of the UK triggering Article 50. The EU 27 are expected to hold a Brexit summit within 4-6 weeks.
Following the news, Sterling dropped against the dollar and the Euro. On Monday, GBP/USD fell around 100 points, from a 3-week high of 1.2435, breaking the level at 1.2400, hitting the intra-day low of 1.2334. This morning the price has rebounded after testing the support line at 1.2340.
Today we will see the release of a series of UK inflation data for February, at 09:30 GMT. It will likely affect the strength of GBP and GBP crosses.
There are 9 Fed presidents and FOMC members scheduled to have a speech this week as below :
Tuesday March 21
10:00 – 11:00 GMT
New York Fed President, a FOMC permanent voting member, William Dudley
16:00 GMT Kansas Fed President, Esther George
22:00 GMT Cleveland Fed President, a FOMC member, Mester
Thursday March 23
12:00 GMT The Fed Chair Yellen
18:00 GMT Minneapolis Fed President, a FOMC voting member, Neel Kashkari
23:00 GMT Dallas Fed President, a FOMC voting member, Robert Kaplan
Friday March 24
12:00 GMT Chicago Fed President, a FOMC voting member, Charles Evans
13:05 GMT St Louis Fed President, a FOMC member, James Bullard
14:00 GMT New York Fed President, a FOMC permanent voting member, William Dudley
The Chicago Fed President Evans stated on Monday that the economy is on a good course, the Fed is on track to raise interest rates twice more this year. If inflation picks up, four times of rate hikes could be possible. Trump administration’s fiscal policy would affect rate hike outlook too.
This week is relatively light on economic data releases. Therefore, the Fed presidents’ prospective hawkish / dovish comments are likely to become the major driver of the dollar moves.
This morning, the dollar index is trading below the significant level at 100.00. The Fed hawks, George and Mester, will likely make a hawkish comment today. However, the selling pressure on the dollar is still heavy.
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