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    Asian Session – Pound tumbles on Brexit concerns; oil up on US rig count drop

    The pound was the biggest mover in Monday’s Asian session as Brexit concerns continue to plague the British currency. On Friday, UK Prime Minister David Cameron struck a deal with his EU partners to give the UK a special status in the EU. However, sterling received only a short-term boost following the successful negotiations as news that London Mayor Boris Johnson, a Conservative heavyweight, had chosen to campaign against the deal heightened fears of “Brexit”.

    The pound climbed to 1.4396 dollars towards the close on Friday but Boris Johnson’s decision over the weekend not to support the prime minister sent the currency to a three-week low against the dollar at 1.4174 today. Sterling also lost ground against the yen, dropping to 160.14 yen, while the euro broke back above 0.78 pounds to climb to 0.7829.

    The US dollar moved higher on Monday as it was underpinned by better-than-expected US inflation data on Friday. The greenback was slightly firmer against the yen at 112.80 yen as weak manufacturing PMI weighed on the Japanese currency today. Manufacturing PMI in Japan fell to just above expansion territory at 50.2 in February, down from 52.3 the previous month. The fall was mainly due to a drop in export orders, which were at their weakest since February 2013.

    Brexit fears also appeared to weigh on the euro as the single currency slipped below 1.11 dollars on Monday to fall to 1.1089 dollars. Stronger-than-expected French flash manufacturing PMI capped the euro’s losses though after the data showed a surprise expansion in French manufacturing activity in February.

    Oil prices were boosted late on Friday after the US oil rig count fell to the lowest since 1999. The data suggests US producers continue to struggle from the slump in oil prices. US oil futures were up 1.7% at $30.15 a barrel in late Asian trading on Monday.

    The Canadian dollar benefited from oil’s rebound and was stronger at 1.3746 per US dollar. The aussie and kiwi were also boosted from firmer commodity prices, as well as a steady yuan. The Australian dollar climbed to 0.7181 versus the greenback, while the kiwi was up at 0.6672.

    Coming up later in the day, flash PMI figures for the rest of the Eurozone are published, to be followed by the US manufacturing PMI in the North American session.

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