Labour Motion Beaten, GBP Falls

13th June 2019 Market Update

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🇬🇧 GBP –  Sterling began the day on the front foot after Boris Johnson announced that he was not aiming for a no-deal Brexit. He reiterated that we must do better than the current deal and must leave by the 31st October. The comments were deemed positively by the markets who had been factoring in that should Boris Johnson take the PM helm then he would have been prepared to take Britain out of the EU with a no deal as an option.

However later in the afternoon all gains following Johnson’s comments were erased after UK lawmakers voted against Labour’s motion to rule out a no-deal Brexit – lawmakers voted 309-298 against.

No data due out today but we have the first round of votes on the Tory leadership contest. Market sentiment will continue to be swayed by Brexit and politics.

🇪🇺 EUR – Quiet day on the news front from Europe with the only thing to note being Spanish inflation figures coming in at 0.8% year on year.

German inflation figures are due today with expectations of the rate remaining at 1.4%.

🇺🇸 USD –  The dollar gained in the afternoon despite Inflation surprising to the downside. Market view seems to be that that the drop in inflation doesn’t warrant the argument enough that the Fed must/need to cut interest rates at this stage and will allow them to keep their options open.

In focus today will be the weekly initial jobless claims
 

Summary:

GBP: First Round of Tory leadership votes today
EUR: German inflation figures in focus
USD: Inflation drops but dollar still buoyant


 

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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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