Home Daily Commentaries Pound recovers in London following last night’s sell-off

Pound recovers in London following last night’s sell-off

Daily Currency Update

GBP/USD was well bid in the lead up to yesterday’s parliamentary vote. The pair traded to 4-month highs, that is until the Cooper amendment – a vote to avoid a no-deal – was rejected by 321 votes to 298 last night. Cable gapped lower by 80 points or so on the news but found good support under and close to the 1.31 figure as the Brady amendment, which passed by 317 votes to 301, gave Theresa May a mandate to go back to Brussels to try and renegotiate the withdrawal agreement, or moreover the future of the Irish border. The Brady amendment “requires the Northern Ireland backstop to be replaced with alternative arrangements to avoid a hard border; supports leaving the European Union with a deal and would therefore support the withdrawal agreement subject to this change."

However, many EU officials have been quick to say that nothing will change at their end. Within minutes of the amendment passing, a spokesman for Donald Tusk, the European council president said “the withdrawal agreement is, and remains, the best and only way to ensure an orderly withdrawal of the United Kingdom from the European Union…..The backstop is part of the withdrawal agreement, and the withdrawal agreement is not open for renegotiation.”

Nevertheless, the pound is holding up well this morning as traders reset and go back to monitoring Brexit headlines, for any signs as to whether either side are willing to give. We also have the small matter of the FOMC announcement this evening, perhaps less important than previous FOMC meetings/announcements given we’re unlikely to get a change in policy or too much of a change in the central bank’s language, but it still has the potential to cause further volatility in GBP/USD.

Key Movers

The USD remains relatively unchanged, the index opening this morning at 95.78. It’s remained steady ahead of some key events later in this week; US-China trade talks are set to kick off tonight, the FOMC have their scheduled meeting this evening, payroll data is set for release on Friday and corporate earnings reports continue to filter through. Overall, with key risks on the horizon, the dollar’s movements have remained modest.

Immediate attentions remain fixed on the Fed. With policy set to remain unchanged, investors will be keenly attuned to Powell’s commentary amid concerns that the recent government shutdown will have wider reaching impacts on first quarter growth. Global markets will also keep a close eye on any news from the on-going US-China trade talks.


EUR/USD has traded a narrow range over the last 24 hours. That said, the single currency has been pressured lower early this morning following the release of weaker than expected German price data, specifically import prices. German CPI was originally due for release today, but this print has since been delayed to 21st February. French consumer spending has also printed well under market expectations this morning.

In terms of data, it’s a bigger day for the euro tomorrow with a plethora of important releases due including European Prelim Flash GDP and German employment data. As for today, a steady range in EUR/USD is likely to ensue.


Australian CPI data printed better than market forecasts overnight, although the more important core measures were stable and under the RBA target zone. AUD/USD rallied on the headline though, gapping up through .7150 and close to the .72 big figure. It opens in London at .7195.

Whether this headline is enough to force a change in the RBA’s policy or language next week it’s unlikely, but it makes things slightly more interesting for traders. But before this, AUD/USD traders have a whole host of mostly US risk events and data to content with.


The CAD is a touch stronger this morning, supported by a shift higher in WTI crude. USD/CAD opens in London at 1.3248 with focus now on US data and events – there’s no data due out from Canada today.


NZD/USD traced the bounce higher in AUD/USD last night, but ultimately the ranges have been narrow amid a lack of local data releases and as investors await the latest US FOMC Statement.

Expected Ranges

  • GBP/USD: 1.3065 - 1.3190 ▲
  • GBP/EUR: 1.1410 - 1.1550 ▲
  • GBP/AUD: 1.8100 - 1.8350 ▼
  • GBP/CAD: 1.7250 - 1.7540 ▲
  • GBP/NZD: 1.9060 - 1.9250 ▲