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Johnson set for hostile reception as parliament is recalled

GBP - British Pound

Yesterday saw the UK Supreme Court drop a bombshell on PM Boris Johnson's Brexit strategy by voting unanimously that his decision to prorogue parliament was unlawful. All 12 judges on the court ruled the move was illegal given the current Brexit deadlock and advised that as a result the decision to call for a Queen's speech had been nullified and had in effect never happened. Political opponents of Johnson rejoiced over the decision, with high profile adversaries such as Scottish National Party Westminster leader, Ian Blackford, new Lib Dem, Chukka Umunna and Independent Anna Soubry amongst other appearing outside court to applaud the courts verdict. House of Commons speaker, John Bercow wasted no time in ordering a resumption of parliamentary debate with MPs set to resume their business at 11:30 am this morning.

The PM looks set for a hostile reception however whether this decision means we are now closer to remaining, leaving with/without a deal or an election or another referendum is hard to call. It looks like we are as we were a few weeks ago with the focus of many MPs from all side now back to ensuring the UK doesn't leave the EU without a deal. This appears to be the primary focus in the near-term, so a vote of no confidence which could inadvertently lead to us dropping out of the bloc without a deal, may be resisted for the time being.

GBP/USD jumped on the news pushing towards 1.25 before retracing as it became apparent that despite this decision the thick Brexit fog will linger on a while yet. Cable currently sits around 1.2445 with GBP/EUR at 1.1315 ahead of what should be an action packed day in Westminster.

Key Movers

Away from the Brexit merry-go-round eyes turned once again to US President Donald Trump as he he threw criticism at the Iranian regime at the UN General Assembly before House Speaker, Nancy Pelosi confirmed an impeachment enquiry against the President had begun. The day started with Trump condemning the alleged bombing of Saudi Arabian oil processing plants by Iranian backed Yemeni Houthi rebels earlier this month. The words did little to comfort jittery world markets. Concerns were raised when it was confirmed that Pelosi would be investigating the way Ukrainian President Volodymyr Zelensky had allegedly been put under pressure by Trump to undermine the campaign of Democrat Joe Biden's bid to become President next year, by delaying aid payments to former Soviet country.

Further developments on the impeachment are due today with Trump protesting his innocence however the uncertainty has dented risk appetite with the yen, swissy and gold remaining well bid. EUR/USD has been relatively stable over the past 24 hours hovering around the 1.10 handle. USD/JPY touched 107 overnight before rebounding to 107.30.

One notable move in the G10 basket was from the kiwi which bounced on the back of a slightly more hawkish RBNZ Rate Statement. NZD/USD pushed up from around .63 to close to .6350 before settling down somewhere in the middle.

Expected Ranges

GBP/USD: 1.2390 - 1.2540 ▼

GBP/EUR: 1.1245 - 1.1380 ▼

GBP/AUD: 1.8280 - 1.8445 ▼

GBP/NZD: 1.96 - 1.9775 ▼

GBP/CAD: 1.6435 - 1.66 ▼