Pound in spin over Brexit

Wednesday 22 May 2019

No surprises in the headline as May flounders yet again over her desperate attempts to get her Withdrawal Agreement through Parliament.

Yesterday I warned " May's "revised" Withdrawal Agreement appears doomed once again (ever thus imho) as Labour reportedly says it will vote against and she's unable to placate her own party even with an offer to throw herself on her sword".

Talk yesterday of offering a second referendum sent the Pound rapidly higher only for the reality check of wide-spread rejection of WA sending it tumbling once again. Further talk now that Tory rebels will work hard to get May out before she even gets chance to offer up her WA and with it any chance of a second referendum. Today's UK CPI data in the frame at 08.30 GMT but not of any real significance given everything going on.Elsewhere the US-China trade talks spat ambles on with no sign of any resolution just yet.

GBPUSD has now posted fresh lows of 1.2662 not seen since January helped by the renewed Pound selling seen in Asia/early European trading after the spike to 1.2814 as the reality check continues with EURGBP rallying back further to 0.8810 (GBPEUR down to 1.1350) after EURGBP buyers around 0.8730 (GBPEUR sellers 1.1455) helped hold yesterday's rapid move.

GBPJPY saw a sharp spike to 141.60 on the general Pound demand and helped by some general USD demand which had seen USDJPY nudge up through 110.30 but has fallen again back to where it started around 139.70 with that dip demand at 139.50 seemingly in play again.

I remain GBP bearish overall and continue to rally-sell as my preferred strategy and buy back in the dips amid all the uncertainty/indecision including Brexit. No change to this view for the foreseeable future. Dip buyers will still expect to find better value for money the lower we head but that's not happening at the moment.

Meanwhile EURUSD continues to find itself tightly bound as we head into the EU parliamentary elections tomorrow while USDJPY finally broke through the 110.30 offers on a general USD demand/better risk sentiment combo but has failed above 110.60. Definitely still a case of rinse and repeat I think, just at slightly higher levels than at the beginning of the week. USDCHF remains tightly bound amid the risk uncertainty with EURCHF holding 1.1260 and the SNB watching closely still.

AUDUSD has paused for breath after its post-election run-around while USDCAD has slid back with some CADJPY buying notable and oil price underpinned still albeit of its highs.

Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

Have a good day out there one and all.

Interbank Rate 08.30

GBPUSD 1.2667

EURUSD 1.1151

EURGBP 0.8805

GBPEUR 1.1355

GBPAUD 1.8407

GBPCAD 1.6975

USDJPY 110.39

USDZAR 14.3493

EURJPY 123.10