Mmm… Well… What an interesting day for global FX markets. The day kicked off with the Court of Justice of the European Union confirming the opinion expressed by the Advocate General that Brexit is indeed reversable. Article 50 can be unilaterally reversed by the United Kingdom should it choose to do so. Despite confirming a greater breadth of possible options available to Britain as it negotiates its potential secession from the Union, the rest of the day left the Pound bruised and battered. The Pound has fallen to 18-month lows as the Prime Minister announced to Parliament this afternoon that the Brexit vote would face a considerable setback. After an emergency cabinet meeting at 11:30 this morning, concerns around May’s capacity to push through the vote through the Commons was confirmed, precipitating a spiral in underlying UK markets. The FTSE 100 index simultaneously slipped, led by tumbling financial equities. The headline index closed the day down 0.8% down, confirming investors’ increasing lack of confidence in British investments through this tumultuous time. Concerns surrounding the Indian central bank, volatility and consequent risk-off sentiment offered a great footing for the US Dollar to appreciate. Emerging markets unsurprisingly endured the wrath of animal spirits.
Today’s Global Market:
Discussion and Analysis by Charles Porter
Why GBPEUR may still move lower Despite a significant leg downwards in late 2022, it seems plausible, indeed likely, that GBPEUR may have further to fall. Late last year and in early 2023, GBPEUR has stabilised with its fall from the teens proving sufficient to redress the changing fundamentals and flows across the currency pair. […]
Short covering Evidence from the CME provides an interesting qualification to the CFTC positioning data that GBP investors have been watching closely. For many years now, markets have held a net short position on GBP, fluctuating from more neutral grounds through to a heavy focus upon achieving selling conviction behind the Pound at times. […]
The Hunt is on: UK Budget and the Global Population The Autumn budget is drawing closer with Jeremy Hunt, Chancellor of the Exchequer within Rishi Sunak’s government, due to announce the measures to the House of Commons on Thursday. Sterling had a rocky start to the week yesterday with major crosses falling as the […]