Daily Currency Update

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Tory leadership votes begin

GBP - British Pound

There were positive signs for Sterling in the early trading session on Wednesday after the opposition Labour party attempted to gain the majority on a new parliamentary legislation that would block a no-deal Brexit. The British currency rose 0.2% to near three-week highs of $1.2740. Many believe this was essential after frontrunner Boris Johnson declared that if he were to become PM, Britain would exit the EU on 31 October, with or without a deal in place. This Labour-led effort however was rejected by MPs 309 votes to 298. Sterling responded to this as it dropped back below the psychological level of $1.27.
Alongside his plans to exit the EU in October, come what may, Johnson outlined the rest of his campaign. He claims “the way to get a good deal is to prepare for a no deal”. He also aims to replace the Irish backstop with “alternative arrangements in order to avoid a hard border and maintain control in Britain’s exit. Additionally, he plans to withhold the £39bn divorce payment that the UK owes the EU until there is “greater clarity about the way forward”.
All eyes today are fixated on the first round of Tory leadership votes, where each candidate must receive at least 5% (17) of all votes in order to stay in the race.

Key Movers

President Trump made headlines again on Wednesday after he changed his tune once again after claiming he had a ‘feeling’ that the US-China trade war could be resolved with a deal. However, in true Trump style, he then went on to once again threaten China with further tariffs if no agreement is reached. A resolution would ease tension worldwide as the trade war continues to derail already-slowing global economic growth.
Yen was on top of the G10 pile on Wednesday after reduced risk appetite in the global markets meant investors moved towards the safe-haven currency. In contrast, investors moved away from the more volatile Aussie Dollar, as it dipped to the bottom of the G10 pile.

Expected Ranges

GBP/USD: 1.2650-1.2740 ▼

GBP/EUR: 1.1190-1.1315 ▼

GBP/AUD: 1.8260-1.8415 ▼

GBP/NZD: 1.9265-1.9405 ▼

GBP/CAD: 1.6835-1.6990 ▼