EU FX Handover: Sterling Pounded Again
Fawad Razaqzada May 17, 2019 8:21 AM
A summary of news and snapshot of moves ahead of the US session.
- GBP has fallen further on news cross-party Brexit talks have collapsed, raising the prospects of a no-deal exit. Labour leader, Jeremy Corbyn, said they have 'gone as far as they can’ but ultimately talks on a compromise deal have ended without an agreement. Meanwhile a timetable for Theresa May’s departure is apparently being set out, but the Prime Minister is determined to try and push her withdrawal agreement forward for a fourth time. Boris Johnson is an early front runner to take over. GBP/EUR has already fallen for 9 consecutive days , its worst run in 15 years, and at the time of writing it looked like we were heading for double digits.
- The dollar has extended its gains in what has been a rather good week for the greenback. It has been supported mainly by outflows in foreign currencies, with GBP, EUR, Commodity dollars and emerging market currencies all losing out. As we highlighted the potential for the drop yesterday, Bitcoin was -11% on the day today, after recovering from an even sharper drop.
- China’s renminbi has extended its drop on escalated trade tensions, in what has been the worst week for EM currencies since the Turkish lira crisis last summer. China’s state media has indicated a lack of interest in resuming trade negotiation talks with the US. Meanwhile a spokesman from China’s Ministry of Commence has stated that he has no information on any US officials heading to Beijing for fresh round of trade talks.
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