Bumpy Ride for Sterling, Government Confidence Vote Eyed

GBP

The British pound had a round trip against major peers yesterday. The pound started the day on a weaker note as investors anticipated a parliamentary rejection for May's latest proposed Brexit deal. May lost the vote 432-202. However, the pound bounced-off the lows to complete the "sell the rumor, buy the fact" scenario. May's government will face a no-confidence vote later today. There are high expectations that the government will not lose this vote, which will propose that the government should come up with a new Brexit plan by Monday. The GBPUSD is trading near $1.2860, and GBPJPY hovered near 139.60.

USD

The dollar index which measures the greenback against a basket of major currencies rose to a ten-day high of 96.26, supported by higher European risks.  The comments of the ECB president Mario Draghi and Brexit uncertainty weighed on the euro and the pound which account for almost 70% of the dollar index. Market participants await the December Retail Sales data and the Beige book later today. The USDJPY is trading near 108.60, and the EURUSD is trading below $1.14.

Metals

Metals price remain caught in a tight trading range despite dollar strength. The gold ounce is trading between support of $1286 and resistance of $1298 as investors look for factors to lift their appetite towards the precious metal. The silver ounce was steady near $15.60, and palladium hovered near $1330.

Oil

Oil prices are back in the positive territory for the week as US inventories drop. The American Petroleum Institute reported that the weekly US crude oil stock fell 0.560 million barrels last week. The West Texas Intermediate futures jumped to $52.28, and the Brent futures climbed to $60.83. Market participants await the release of the official inventory data by the Energy Information Administration later today.

Major Economic Events

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