houses of parliaments

Rebel MPs threaten no-deal Brexit

16th August 2019 Market Update

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🇬🇧 GBP –  Sterling gained across the board yesterday with traders buoyant over efforts by MPs to prevent a no-deal Brexit. Rebel Tory MPs Dominic Grieve, Caroline Spelman, Oliver Letwin and former Conservative Nick Boles have agreed to meet Labour leader Jeremy Corbyn to discuss how they can stop Boris Johnson pursuing a no-deal Brexit, although they have not committed to backing him as a caretaker leader. The Liberal Democrats have resisted Corbyn’s advances and have revealed their own party proposals to stop a no-deal which includes an emergency cross-party government, led by Ken Clarke or Harriet Harman.
On the data front, retail sales came in better than expected at 3.2% vs 2.6% expected adding to the positive data seen throughout the course of the week. No data out today but markets will remain sensitive to any further developments by MP’s to prevent a no-deal Brexit.

🇪🇺 EUR – The euro suffered a sharp sell-off in the afternoon after EU official Olli Rehn commented that the ECB will announce a package of stimulus measures in September that will overshoot current market expectations. The euro now sits at its weakest level against both the pound and the dollar in August.

🇺🇸 USD –  Retail sales and core retail sales in the US came in better than expected at 0.7% and 1.0% respectively in July, with the dollar index rising to the highs seen on August 2nd now above 98. This afternoon building permits are being released at 1.30pm, and preliminary consumer sentiment at 3.00pm. Both readings are expected to be lower than the previous months, however they are unlikely to have a significant impact on the exchange rates.

 

Summary:

GBP: Sterling strengthens as MPs attempt to block no-deal
EUR: Expectations for renewed stimulus weakens the euro
USD: Strong retail sales supports the dollar


 

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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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