Home Daily Commentaries A mixed bag for Boris

A mixed bag for Boris

Daily Currency Update

GBP - British PoundIt was a mixed day for PM Johnson on Tuesday as GBP/USD dipped from 1.2990 to 1.2860 on the back of a number of votes in parliament. British lawmakers voted by 329 to 299 in favour of Johnson’s Withdrawal Agreement Bill however voted against the proposed fast track Brexit timetable, leaving EU negotiations in limbo. Johnson has paused the legislation talks and is waiting for the EU leaders to make a decision on whether an extended Brexit is once again appropriate. EU Council President Donald Tusk has urged EU leaders to back an extension however there are still those that oppose this notion. The 3 most likely responses from the EU are:1. Grant UK extension until Jan 2020.2. Grant UK ‘flextension’ until Jan 2020 (will have specific T&Cs and allow for the bill to pass through before the proposed deadline.3. Hold firm on the current proposed Oct 31st deadline.If the Brexit deadline is extended to January, it is likely PM Johnson will push for a general election. He was quoted saying ‘If we can't crack on, regrettably it does seem that a general election is the only way to sort this impasse out’. A general election could be held as early as 28th November.

Key Movers

The US-China trade war tensions still remain at the forefront of the global political landscape. The first phase of a trade agreement is still yet to be finalised before the Asia-Pacific Economic Cooperation summit in Chile in mid-November. A break down in discussions would almost certainly lead to a slip in USD positioning. All eyes now turn to a spread of European and US economic data posted tomorrow, including the ECB rate decision and a number of manufacturing and services PMIs.

Expected Ranges

  • GBP/USD: 1.2810 - 1.2915 ▼
  • GBP/EUR: 1.1510 - 1.1620 ▼
  • GBP/AUD: 1.8705 - 1.8885 ▼