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By xemarketanalysis July 9, 2018 1:46 pm
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    XE Market Analysis: Sterling Slumps as Davis and Johnson Resign


    • The Pound has slumped today on Brexit resignations.
    • The Dollar steadies on risk trade.
    • The Loonie is strong as markets expect an interest rate hike this week.


    The Pound had started the day unfazed by the resignation of Brexit Minister David Davis, however this afternoon the resignation by Boris Johnson hit the Pound hard. The negotiation with Europe just got a little more difficult today! The Pound looks fragile in the days ahead.


    The Dollar took full advantage of the selling of Sterling and performed its traditional safe-haven role, mopping up a significant amount of flow. The US Dollar had started the day focusing on trade issues unsure of further interest rate hikes but ends the day on a firm footing after risk aversion took hold. 


    The British Pound is weak this afternoon as Brexit negotiations look even more difficult after the resignations of David Davis and Boris Johnson. Only three months before the UK Government is expected to finalize a transition deal with the EU. As they are without a Brexit minister and foreign minister, the Brexit "grey cloud" is a little darker today. 


    The Euro is firm this afternoon as the expectations for a soft Brexit were strengthened by the resignation of David Davis and Boris Johnson. The single economic area which enjoys significant income from trade with the UK will take a positive from today’s results.


    The Loonie is stronger today as the price of crude oil and chance of an interest rate hike helped the Canadian unit stronger. The market is currently expecting a 90 percent chance of an interest rate hike.


    The Aussie Dollar is largely unchanged today after a decent start. The risk aversion trade has hampered any meaningful progress this afternoon. 


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