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A change of heart for Bojo?

GBP - British Pound

PM Johnson is beginning to conduct Brexit negations with far more transparency than he has done previously. He wrote to the European council, proposing that the Irish backstop be replaced by alternative arrangements by the end of a post-Brexit transition period. Johnson plans on using the deal his predecessor Theresa May agreed as a template and alter particular details that may leave the UK worse off economically, politically and socially. Contrary to the public perception, Johnson has claimed that reaching a mutually beneficial agreement is his government’s highest priority. Despite that, a no deal Brexit is very much still on the table.
Sterling hardly gained from the announcement however if Johnson is serious about reaching an agreement, the upside for GBP over next 6-months will be far greater than previously thought.

Key Movers

Today marks a crucial day for Italian politics. PM Conte is due to face a confidence vote in the senate this afternoon. There are 2 likely outcomes that may arise from the vote:
1. A snap election
2. A new party alliance between Salvini’s far-right League and the Five Star Movement
Italy are currently facing a debt crisis and political instability. Ever since the UK voted to leave the EU there have been reports, studies and surveys released from Italy suggesting that if they were to have a vote, the people’s vote may go the same was as that of the UK’s.
Across the pond, President Trump is ponce again commenting on the state of the US economy and the path the Federal Reserve should take to maximise economic output. He claimed that the Fed rate “over a really short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well.”
Trump has previously voiced his encouragement of weakening the USD in order to offset losses that have come about from the US-China trade war. If Trump gets his way, expect a USD downward trend for the next 6-months.
The FOMC minutes tomorrow should provide more of an insight into what the Fed intend on doing.

Expected Ranges

GBP/USD: 1.2040-1.2145 ▼

GBP/EUR: 1.0875-1.0970 ▼

GBP/AUD: 1.7750-1.7915 ▼

GBP/CAD: 1.6025-1.6185 ▼

GBP/NZD: 1.8800-1.8960 ▼