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MTrading Team • 2023-02-28

GBPUSD trims Brexit news-led gains as USD rebounds amid month-end consolidation

GBPUSD trims Brexit news-led gains as USD rebounds amid month-end consolidation

Traders appear cautiously optimistic as the volatile February comes to an end. The mildly upbeat sentiment, however, fails to weigh on the US Dollar as the greenback braces for the first monthly gains since September 2022.

Headlines surrounding the US-China ties and Brexit seem to have underpinned the risk-on mood while hawkish central bank comments keep the yields firmer. The same recall the USDJPY buyers while weighing on the Antipodeans and major currency pairs.

GBPUSD fails to keep the previous day’s gains, the biggest in a month, as traders doubt the Brexit deal’s acceptability among British lawmakers.

Elsewhere, Gold reverses the previous day’s recovery moves at the lowest level in 2023 while Crude Oil prints mild gains amid mixed catalysts.

BTCUSD and ETHUSD extend the week-start losses even as the Crypto industry appears off the harsh regulatory concerns in recent times.

Following are the latest moves of the key assets:

  • Brent oil reverses the previous day’s losses with nearly 1.0% daily gains around $83.00.
  • Gold braces for the biggest monthly loss since early 2021 near $1,810.
  • USD Index prints mild gains as it rises back towards 105.00.
  • Wall Street closed in the green and allowed the equities in the Asia-Pacific region, as well as shares in Europe and the UK, to print mild gains.
  • BTCUSD and ETHUSD print minor losses around $23,300 and $1,620 as we write.
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US Dollar remains firmer despite month-end inaction 

Market sentiment improved early Wednesday as the US refrained from strong regulations on China companies while the UK-EU due takes a step forward to overcome the multi-month-old policy deadlock. Adding strength to the optimism could be China’s readiness for more stimulus, as well as incoming Bank of Japan policymakers’ defense of the easy-money policies.

GBPUSD fades Brexit-inspired gains while EURUSD also remains pressured as ECB hawks fail to convince markets of no recession. Elsewhere, USDJPY regains upside momentum despite mixed Japan data while Australia fails to cheer strong Aussie Retail Sales amid a broad US Dollar rebound.

Gold remains on the bear’s radar despite China-linked optimism while Oil gains around 1.0% amid hopes of more energy demand.

Cryptocurrencies struggle to justify industry data suggesting more inflow of funds and bullish bets as traders seek confirmation of near-term stabilization of the market.

  • Strong buy: USDJPY
  • Strong sell: ETHUSD, GBPUSD
  • Buy: USD Index, USDCAD, Nasdaq, EURUSD
  • Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

Multiple US data in the data

Having witnessed mixed prints of the second-tier US statistics, today’s economic calendar offers multiple data concerning US consumer sentiment and industrial activities. Also important to watch are the GDP figures from Switzerland and the UK. Above all, the market’s conviction of the hawkish Fed bets and recession woes keep the traders directed towards the US Dollar buying.

May the trading luck be with you!