The next last chance for Theresa May's Brexit Bill

3 minute read


The US retail sales data were a classic good-news-bad-news balancing act. Sales increased by 0.2% in January, rather than being flat as analysts had predicted. The control group, which feeds directly into the consumer price index data, was up by 1.1% - almost double the expected 0.6% rise. However, there were significant downward revisions to the already-shaky December numbers. The control group sales, for, example, fell by 2.3% in December rather than the 1.7% decline originally reported.

So the January data were better than expected only because they were calculated from a lower base. Investors were not wholly convinced. The USD did eventually strengthen after the numbers came out but the rally did not last long and it eventually found itself lower on the day.


The euro did not have an axe to grind on Monday and it had no more skin in the game this morning. The only Euroland ecostat was France's nonfarm payrolls, which increased by 0.2% in the fourth quarter. The number was double the expected 0.1% increase but it passed by almost unnoticed.

There was some overnight help, though, from improved sentiment about Brexit. An agreement of sorts between Britain's prime minister and the president of the European Council supported the idea that the UK government could possibly win support for its withdrawal bill, which goes to a vote in the House of Commons this afternoon. The euro's late gains put it 0.2% higher on the day against the USD.


The Loonie followed oil prices higher. Neither went far: WTI crude added 1.2% and only a cigarette paper separated the CAD from the USD.

There were no economic data from Canada and there is nothing of any consequence on the agenda until Friday's manufacturing shipments for January. All is quiet on the trade front. The White House said yesterday that no date has been set for a meeting between the US president and Xi Jinping.


There was a degree of theoretical excitement this morning when the UK manufacturing and industrial production figures came in better than expected. Instead of falling by the forecast 1.9% in the year to January, manufacturing was down by only 1.1%. Industrial production declined by 0.9% rather than 1.3%. The trade deficit for January was considerably wider than expected but GDP growth of 0.5% for the same month was ahead of the forecast 0.2%.

Aside from those irrelevances, Britain's prime minister came back from Brussels last night with a piece of paper on which the European Commission stated its acceptance of a "legally-binding" way out of the Irish backstop arrangement. It improves - but does not guarantee - the government's chances of getting its withdrawal bill through parliament this afternoon. And for that, investors were delighted. The GBP was the day's top performer by far, strengthening by 1.7% against the USD.


Relief at the US retail sales data and the rapprochement between Downing Street and Brussels contributed to a more optimistic attitude among investors. Their improved mood made them less inclined to seek the security of the safe-haven currencies. As a result the JPY shared last place with the CHF, losing 0.2% to the USD.

The only Japanese ecostat was the Ministry of Finance's Business Survey Index for large manufacturing. It was of no help to the JPY, falling nearly 13 points to -7.3 in the first quarter.

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