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Pound plunge continues unabated on Brexit blockage

GBP - British Pound

A lack of Brexit progress and risk off trade continues to weigh on the pound sending GBP/USD another cent lower over the past 24 hours. PM Theresa May is set for another meeting with the Tory backbench 1922 Committee later today as they again try and get her to commit to a concrete date for her departure. The PM appears reluctant to stand down until she gets her withdrawal agreement through and with many Brexiteers still unhappy with the plan and the cross party talks with Labour making little progress, ongoing uncertainty is sending the quid lower. May looks set to try and get her plan approved in a parliamentary vote in June but if that fails we look set for another series of indicative votes, a PM refusing to leave meaning the chances of of a no-deal Brexit rise, which is the real fear for pound traders. GBP/USD currently sits at 1.2830 with GBP/EUR back down to 1.1445.

Key Movers

Tensions are continuing to build between the US and China over trade weighing on risk assets globally. Equity markets an the antipodean currencies are bearing the brunt of the impasse to the benefit of the usual safe havens the yen, the swissy and gold. USD/JPY remains under 110, USD/CHF is slipping ever closer to parity and gold a shade under $1300 an Oz. Both sides are making exchanges blaming the other for the apparent breakdown in negotiations and tit-for-tat hikes on tariffs loom ever closer on the horizon. Chinese data disappointed to the downside yesterday with fixed asset investment and industrial production numbers both missing target highlighting the impact spat is having on the worlds second largest economy.

Despite this downbeat news there was actually some positive data to lift the mood in the Eurozone with Germany posting a healthy Q1 GDP print of 0.4% a sharp rebound from Q4s flat reading. The eurozones overall Q1 GDP reading also came in at 0.4% too however a positive outcome to the trade dispute is badly needed to lift the shared currency which continues to trade around the 1.12 handle.

Overnight Australia's unemployment rate was shown to have unexpectedly risen to 5.2% from 5% adding extra pressure on the RBA to cut interest rates sooner rather than later.

Expected Ranges

GBP/USD: 1.2770 - 1.29 ▼

GBP/EUR: 1.1370 - 1.1525 ▼

GBP/AUD: 1.8470 - 1.8650 ▼

GBP/NZD: 1.9480 - 1.9670 ▼

GBP/CAD: 1.7150 - 1.7325 ▼