Daily Brexit update: Sterling only levitates vs. dollar
Again, if sterling looks to be levitating above the global melee on Thursday, it’s an illusion that holds only so far as North America. Sterling has remained aloft against the Canadian dollar and the greenback all session. Despite the Federal Reserve last night raising rates by 25 basis points, as expected, and characterisation of the U.S. economy as “strong”, signals pointing to a coming recession prevail. Without flattering optics from weak CAD and USD though, pressure on the pound is clear enough. A subdued Bank of England statement has pointedly turned the Brexit threat level up a notch, noting that uncertainty had “intensified considerably”.
How this affects our Brexit Top 10 markets:
GBP/USD: At least whipsaws are slower this week. Still, what else can we call the run to early $1.270s on Thursday before an almost complete reversal of the move to a $1.2623 low before the swing to $1.2675 at last check? This largely directionless bid remains bound by the week’s $1.2605 low on Wednesday and $1.2706 topside from earlier this session.
GBP/JPY: Looking at highs from four out of five of the last sessions a strong case is building for resistance across ¥140.92-¥140.98.
EUR/USD: Still among the main beneficiaries of dollar woes. It was up 77 pips at $1.1450 dead just now. Short of the day’s $1.485 high.
EUR/GBP: The most rangebound cross, facing persistent impediments at what is emerging as a pivot at .9036.
UK 100: A 0.8% slide compared to say, the DAX’s 1.4% loss counts as outperformance. A bounce by heavyweights like Vodafone, BT and easyJet helps.
Germany 30: Germany’s main index fell harder due to the smaller concentration of top weightings on fewer shares, like Daimler, VW, BMW and ThyssenKrupp, making for a bigger drag.
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