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
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Morning Brief – Never a dull non-farm
Charles Porter
Tue 7 Feb 2023
Never a dull non-farm Non-farm payrolls data almost always provides the observers an opportunity to witness and potentially trade with some volatility in the markets. More often than not the salience of the event and the mixed expectations moving into it leads to more price fallout from the noise generated from the event instead of […]
Morning Brief – Federal Reserve
Humphrey Percy
Wed 8 Feb 2023
Federal Reserve Chair Jerome Powell gave a speech in Washington last night that further confirmed his hard line thinking: US interest rates will need to go up more and probably it will take two separate rate rises to see if that is sufficient-the clear implication is that if it needs more, then that is what […]
Morning Brief – US Economy
Humphrey Percy
Mon 6 Feb 2023
US Economy The US job figures on Friday most certainly set the cat among the pigeons: with non farm payrolls expected to be up by 187,000 and the market’s expectation that Chairman Powell of the Federal Reserve was talking the talk rather than walking the walk when he had said last Wednesday that rates were […]
