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Johnson unwillfully seeks extension

GBP - British Pound

Last week saw a fantastic week for the British currency after Prime Minister Boris Johnson made a lot of progress with his Brexit divorce deal, leaving GBP/USD trading at 1.2990, levels not seen since May ’19. This highs were short-lived however as GBP found itself retracing on the back of inside information leaks. A parliamentary vote was expected on Saturday morning however unfortunately for Johnson, said vote was delayed until later this week. This meant that by law PM Johnson was forced to send an extension request to the EU. However both Johnson and Gove still stand firm on their no extension mantra, therefore leaving the request unsigned, still claiming they will be leaving on Oct 31st with or without a deal. There is optimism surrounding Johnson’s chances when the deal is voted on in parliament, as he is expected to receive 325 in favour of his vote, despite only needing 320. Analysts now predict that an extension is the most likely result come Oct 31st however with Johnson at the helm, it is impossible to make any accurate estimations.

Key Movers

Here comes a big week for the Euro/Eurozone. As well as a number of Manufacturing/Services PMI data releases, Thursday brings an ECB interest rate decision. It is expected that the ECB will take a dovish stance on the decision and therefore leave rates unchanged on this occasion, as there is very little room for manoeuvre on the IR downside in the zone. The US also has important data releases on Thursday, as we see figures posted for Manufacturing PMI and monthly Core Durable Goods Orders.

Expected Ranges

GBP/USD: 1.2950-1.3065 ▲

GBP/EUR: 1.1550-1.1680 ▲

GBP/AUD: 1.8875-1.8955 ▲