Tumultuous times in the UK
Things have gone from bad to worse in the UK as the Brexit crisis deepens.
The US dollar weakened overnight, allowing paired currencies to rise throughout the session. The EURUSD opened the day at $1.09732 and dipped to an early low of $1.09671 before remaining near those levels for the next several hours. Mid-session trading saw the pair pick up, climbing to a high of $1.10379 late in the day. The euro has maintained those levels and is currently trading at $1.10340. The GBPUSD followed suit, shaking off political concerns to post some solid gains overnight. The pair opened at a low of $1.20716 and basically headed on an upward trajectory for the whole day. The pair peaked $1.22500 in the final hour of the day and is now trading at $1.22462.
The Dow bounced back to life yesterday, wiping out the losses suffered in the previous session. The index started the day at 26,090.71 and dipped to lows of 26,073.43 early in the day before taking off shortly afterwards. The Dow rallied to a high of 26,380.90 in the final hour of the session and is now trading at 26,362.83. The Dax put in a solid performance overnight after beginning the day around 60 points higher than its previous close. The Dax opened at 11,984.24 and fell to an opening-hour low of 11,975.87 before taking off and rallying to a high of 12,077.07 a few hours later. It could not hold onto those highs but still managed to finish the day in positive territory, closing at 12,036.40.
Brexit is causing more turmoil in the UK, with the House of Commons voting against the possibility of the UK leaving the EU without a deal. Supporters say that this ensures that the PM gets a deal don’t and doesn’t crash out of the EU, while the PM and his supporters are saying that the parliament is taking away huge bargaining tool away from the PM during negotiations. This piece of legislation still needs to pass the House of Lords. The PM also failed in his bid to call for an early election, despite consistent campaigns for the opposition to do so for the last 12 months or so. This effectively leaves Boris Johnson with little room to move at the moment. The UK, and markets for that matter, will now wait and see if this no-deal legislation is passed before making their next move, although there may be a few surprises between now and then.
Data published today includes:
Australia – Trade Balance, AIG Construction Index
UK – MPC Member Silvana Tenreyro speaks
Canada – Governing Council Member Lawrence Schembri speaks
Europe – Swiss GDP, SNB Chairman Thomas Jordan speaks, German Factory Orders
US – ADP Non-Farm Employment Change, Revised Non-Farm Productivity & Unit Labour Costs, Challenger Job Cuts, Final Services PMI, ISM Non-Manufacturing PMI, Factory Orders, Natural Gas Storage, Crude Oil Inventories
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