Another big vote in Britain, another big move in the U.K. pound. Sterling rebounded ahead of a vote today in the British Parliament on whether to exit the EU without an agreement. The pound’s tentative rise added a headwind on the U.S. currency whose rally has been undercut by tepid data. The euro, yen and Canadian dollar were little changed. Negative data Down Under weighed on both the Aussie and kiwi dollars. Sterling plunged Tuesday after lawmakers again rejected the prime minister’s Brexit deal. More parliamentary votes are slated for today and tomorrow that risk another marked surge or slide in the U.K. currency. Sterling’s pop today reflects expectations that Britain will vote against leaving the bloc without a deal, the disorderly route that’s long plagued it. Lawmakers Thursday are expected to vote to postpone Brexit to beyond this month. Across the Atlantic today, the greenback’s direction could hinge on durable goods and producer inflation data. 

 

 

The euro continued to crawl above 20-month lows, helped by better news on the bloc’s economy. Meanwhile, the dollar rally has lost a step as tepid U.S. data push down Treasury yields, diminishing its allure. Euro zone industrial production topped forecasts with a 1.4% rise in January. The data is only likely to offer a short-lived boost to the euro given how economic momentum remains tilted downward.

 

 

Sterling swung from losses to gains ahead of a vote today in the British Parliament that’s expected to reject the disorderly route of leaving the EU without a comprehensive trade agreement. The pound tumbled earlier this week after lawmakers again resoundingly rejected Theresa May’s plan to take Britain out of the EU. Despite all the Brexit confusion, the pound continues to take its broad cues from an expectation that Britain might ultimately vacate the EU with a trade agreement, the orderly route seen limiting economic fallout. Britain Thursday is expected to vote in favor of delaying Brexit beyond March 29. Delaying Brexit could open the door to potentially more pound-positive outcomes such as a soft Brexit or a second referendum. 

 

 

Canada’s dollar clocked one-week highs as oil rose and the big dollar’s rally lost horsepower. Crude appreciated by a percent to above $57, a boon for commodity-influenced assets. Meanwhile, the greenback has gradually lost altitude after a run of underwhelming data on job growth and consumer inflatin. The data tugged U.S. Treasury yields lower, dampening the greenback’s appeal and validating the Fed’s move to postpone higher borrowing rates. 

 

 

The dollar pared losses after durable goods surprised to the upside. Somewhat easing fears of slower U.S. first quarter growth, durable goods unexpectedly rose in January, with a 0.4% increase. Moreover, the gauge of business spending also topped forecasts, with the 0.8% jump the fastest in 6 months. Support to the buck from the data was limited, however, as another survey on producer prices was consistent with tame inflation, a factor behind the Fed’s break from raising interest rates.