Sterling steady ahead of Supreme Court decision
Tuesday 24 September, 2019
Daily Currency UpdateGBP - British PoundAfter falling short of the 1.25 handle during yesterday's Asian session, GBP/USD retreated to around 1.2430 where it continues to trade ahead of this morning's Supreme Court ruling re: PM Boris Johnson's prorogation of parliament. The ruling due at 10:30am will decide whether Johnson acted within the law in ending the current parliamentary session thereby limiting the amount of time MPs have to debate and scrutinise the PMs Brexit plans. Two weeks ago a Scottish court ruled against Johnson saying it was illegal to end the current session given the current Brexit impasse. The Supreme Court is the highest court in the UK and the government has stated they will abide by its decision which could see MPs recalled immediately should they concur with the Scottish courts decision. Its likely the pound will jump should the court rule against the government however upside will likely be limited given the uncertainty that will remain over Brexit. Yesterday saw the Labour Party vote in favour of its current neutral strategy re: Brexit voting against changing to a pro-remain stance. GBP/EUR trades at 1.1315.
Key MoversYesterday saw risk off trade envelop world markets as all notable monthly Eurozone PMIs missed target. Services and manufacturing for Germany, France and the EZ as whole fell short of expectations with the closely followed German manufacturing gauge printing its worst reading in over ten years. It seems Europe's powerhouse has slipped back into recession and markets are hoping that Germany's government loosens its purse-strings to try and stave off a more entrenched downturn. EUR/USD is trading just under 1.10 recovering from around 1.0965 that was seen first thing yesterday. European Central Bank chief, Mario Draghi stated no rebound was in sight in comments given to the European Parliaments committee on economic affairs however the impact on the shared currency was limited given Draghi is serving out his last few weeks as the banks governor ahead of Frances Christine Lagarde taking office on November 1st.In America, Donald Trump is again being embroiled in a voting scandal, this time involving the Ukraine and allegations that Trump asked the Ukrainian President, Volodymyr Zelensky to investigate Democrat, Joe Bidens 2020 election campaign. This along with the poor EZ data and ongoing tensions in the Middle East kept safe havens well bid despite reports that US/China trade talks were set to resume next month. USD/JPY sits at 107.60.
- GBP/USD: 1.2370 - 1.2520 ▼
- GBP/EUR: 1.1250 - 1.1380 ▼
- GBP/AUD: 1.8260 - 1.8430 ▼
- GBP/NZD: 1.9675 - 1.9875 ▼
- GBP/CAD: 1.6430 - 1.6575 ▼