GBPUSD,H1
The Dollar rallied across-the-board before giving back some of its gains. The USDIndex (DXY) gained over 0.5% in posting a 17-month high of 97.58, while EURUSD concurrently printed a 16-month low of 1.1240 and USDJPY a six-week high at 114.20. Sterling racked up losses against not only the Dollar but most other currencies too; it declined 1% versus the Dollar, marked a 0.9% loss against the Yen and a 0.4% fall to the euro. Cable pegged a two-week low at 1.2827 around S3. The October low for Cable was 1.2692, the high was 1.3260.
Fundamental pressure hangs on the Euro from the uncertainty swirling around the situation in Italy, whilst a raft of negative Brexit stories continue to dog the pound. Reports from the BBC and Telegraph citing cabinet members suggesting their flagging support for the government’s Brexit plan, coming after Friday’s late resignation of cabinet member Joe Johnson, have rattled markets. Without reassurances, market participants are left with little choice but to increase the Brexit discount on Sterling. Donald Tusk is also reported (in a tweet from the Political editor of the Sun) to have Wednesday (November 14) night as a deadline for Mrs May if there is to be Brexit talks at the November 27 summit. The tweet reads – Tusk has told No10 that a deadline for a November summit is this Wednesday night. But it appears the Govt is beginning to give up hope for one. Whitehall source: “I wouldn’t get your hopes up”.If not then it drifts into the New Year, which in turn will put extreme pressure on the UK Parliament to pass all the necessary legislation in time for the March 29 2019 deadline.
Yet another “interesting” week ahead for Mrs May and Sterling.
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Stuart Cowell
Head Market Analyst
HotForex
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