Sterling Hit by Further No Deal Brexit Concerns

10th July 2019 Market Update

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🇬🇧 GBP –  Retail sales slumped in UK, falling into negative territory for the month of June, though with a lack of any other data in the day yesterday markets continued to focus on Brexit. On that front, the speaker of the house John Bercow rejected the latest plan from Dominic Grieve, which would make it harder for the next Prime Minister to suspend Parliament to try and force the UK out of the EU with no deal. However, MPs did vote in favour of a bid to require ministers to give fortnightly updates on the situation in Northern Ireland. Overall the prospects for a no deal Brexit remain a major concern and have further pressured the pound.

This morning, manufacturing and industrial production coupled with trade figures could help support the pound as these are expected to be fairly positive.

🇪🇺 EUR – Greece is back in the news as the Eurozone warns the Greek government not to breach the current budget surplus required under the terms of the last bail out. However, the fears are that the incoming Greek PM has a history of calling for increased spending and lowering taxes.

There are no data releases expected today though the ECB is having a non-monetary policy meeting .

🇺🇸 USD –  The dollar hit new highs yesterday ahead of Fed Chair Jerome Powell’s testimony before congress and the Fed’s last policy meeting on possible rate cuts tonight. Following the surprisingly good jobs figure last week the likelihood of a rate cut by the Fed has been slashed though we may well see a smaller cut than expected.

 

Summary:

GBP: Sterling remains on the back foot as no deal Brexit concerns rise
EUR: Greece back in the limelight as new PM expected to increase spending
USD: Dollar hits new highs ahead of Fed meeting and speeches


 

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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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