The US dollar index fell to three-week low following Fed chairman Powell’s testimony to the Senate Banking Committee, in which he reaffirmed central banks would remain patient in rate hikes amid weaker global growth prospect and ‘crosscurrents and conflicting signals’ in domestic economy.

Powell’s dovish comment, alongside a sharp unexpected fall in US Housing Start numbers released last night, weighed on the greenback. Three US indices closed mildly lower.

Sterling strengthened sharply against USD and EUR on the back of Theresa May’s plan to delay the 29 March Brexit deadline, in the event that no deal is agreed in the upcoming vote. This boosted confidence in sterling as it ruled out an immediate ‘hard Brexit’ scenario and a political ‘cliff edge’ is avoided. GBP/EUR climbed to 21-month high of 1.167 before pulling back to 1.163 this morning. Technically, it breaks out a resistance level of 1.160, but momentum indicator RSI suggest temporary overbought. GBP/USD reached a five-month high of 1.325, facing immediate resistance at current level. Similarly, its RSI has also extended into the overbought territory of 74%, and hence a technical correction from here is possible.

Geopolitical risk is back to the centre stage as India’s fighter jets crossed the Pakistan border in an airstrike, a retaliation act in response to a terrorist attack in Kashmir in mid February. Market worries that the airstrike would inflame tensions between the two countries, and more of these could happen ahead of India&rsquo s general election scheduled in April. India’s Nifty 50 index opened sharply lower but subsequently erased losses and nudged higher at day close.

China A share markets suffered profit-taking on Tuesday, pulling back from Monday’s gain as the rally seemed to be overstretched in the short term.

The rest of Asia were mostly red too – Singapore’s STI closed 10 points, or 0.33% lower. Disappointing bank earnings released last week continued to weigh on sentiment. SGX’s weekly fund flow report shows that institutional money are swinging away from the three local banks, which amounts to S$195 million net outflow from institution’s book last week. Technically, STI faces selling pressure at around 3,270-3,280 area, and immediate support is found at 3,200 points.

Falling crude oil prices led to profit taking activities in Singapore’s offshore & marine sector, with Keppel Corp, Sembcorp Marine, Sembcorp Industry all entering second day prices consolidation.

GBP/USD

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