Brexit Delayed, Election Fears Weigh on Pound

12th April 2019 Market Update

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🇬🇧 GBP –  Sterling markets were flat yesterday despite the UK being granted a six-month extension for Brexit. Whilst most investors were expecting an uptick in sterling moves following the extension, it does appear that the market had already anticipated this news. The factor that seems to be playing on the minds on the market seems to be the fear of a possible change of leadership in the Tory party or another general election being called. Any change in the political landscape could well change the direction of a deal/no deal and thus that uncertainty would weigh on the pound.

No data out today and with parliament now broken up for Easter, not much is expected on the pound but the fear of a change in the political spectrum looks likely to weigh on the pound.

🇪🇺 EUR – German and French inflation figures came in as expected yesterday but the euro did weaken off throughout the course of the trading day.

However the euro is in demand today as Japan’s Mitsubishi UFJ is buying the financing division of Germany’z DZ Bank with a reportedly €5.6bn being purchased and thus supporting the currency.

The euro is now at its strongest level since March 29th versus the dollar.

🇺🇸 USD –  The only thing to note from yesterday was that the latest jobless claims hit their lowest levels since 1969 causing the dollar to be in demand.

Dollar trading still seems to be in relative demand on fading expectations of a rate cut this year.

 

Summary:
GBP: Market focus now shifts to potential change in political landscape
EUR: Euro buoyant and continues to strengthen
USD: Jobless claims lowest since 1969

 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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