Brexit Bears:
The Pound continued to dive during Friday’s US session, with the Pound trading just shy of 0.89 pence per Euro. As leaders of both major political parties in the UK participated in televised debates, further light was elucidated upon the Brexit deal. Around midday, Sterling took a considerable dive through, momentarily dipping through 1.12 within GBPEUR and even breaking through 1.28 against the US Dollar. The dip coincided with news reports that Spain was dissatisfied with the incumbent Brexit deal, believing it to be against the domestic interests of Spain. Sterling traders have shaved value off of the Pound since the Brexit deal emerged alongside a flurry of cabinet resignations. Last week’s bearish Sterling tilt has been precipitated by concerns over May’s domestic political stability. However, with ratification of any deal within the European Council being drawn into question as well, the Pound continued to suffer. Within cable, the Pound fell by approximately 0.65% within a matter of minutes. The Rand weakened following a strong start this morning amidst a combination of Dollar strength and further fiscal concerns. Domestic fiscal pressures compiled as the IMF warned that South Africa’s next budget should include debt limit in order to shore up support for its underperforming domestic soft debt. Volatility throughout the global economy continues to remain elevated with the VIX holding onto a 20-handle.
Discussion and Analysis by Charles Porter
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