The trend of GDPUSD
The trend of GDPUSD
The US dollar and the pound were steady on Wednesday, and EU leaders are considering a request for a postponement of the Brexit, which is expected to extend the October 31 deadline by three months.
European Council President Tusk said on Twitter late Tuesday that he has suggested that EU leaders support the postponement of voting. British Prime Minister Johnson was forced by the parliament to extend for three months. However, some EU countries, especially France, may still require shorter deadlines. Johnson called the European Council President Tusk this morning to inform Tusk that he opposed the extension of Brexit and still hopes to leave the EU on October 31. The parliament will vote on the extension of Brexit and the parliament will hand over control to the EU.
EU officials recently stated that the EU will not decide on the extension of Brexit today. And then the decision may be made on Friday. Earlier, the British parliament made a dramatic vote on Tuesday, accepting the agreement in principle, but vetoed a three-day timetable for passing the necessary legislation. After the pound fell against the dollar and the euro on Tuesday, foreign exchange trading was generally calm. Today, the pound/dollar rose, hitting a high of 1.29115. The US dollar index also rose slightly, hitting a high of 97.66 in the day.
Johnson had previously threatened that if the parliament did not agree with his timetable, he would cancel the agreement, but he did not honour the threat. The market believes that this almost eliminates the possibility of no agreement to leave the European Union. Earlier Wednesday, the uncertainty of Brexit boosted safe-haven currencies. However, after the outside world believes that the EU may approve the extension, the rise of the yen and the Swiss franc will fade. The yen fell slightly to 108.55 against the US dollar and 0.991 against the Swiss franc.
The US Dollar index weakens for the 7th straight day as investors’ appetite for risk increases. The AUD/USD has broken the 0.69 mark, with the USD weaker against its G10 currencies, with global indices rising on forward optimism on a quicker recovery from the effects of the Coronavirus. US Indices have seemed to quickly discount the effects of the protests as they continue for the 8th straight day.
A couple of weeks ago, I wrote an article about the decorrelation between Wall Street and Main street. Back then, this was related to the Coronavirus’s impact on everyone in the light of Wall Street’s impressive rally. While Main street is still reeling from the devastation the Coronavirus has brought, current protests due to another incident involving a white policeman killing a black man have sparked outrage all over the country.
Will Hong Kong abandon the peg against the USD? The financial hub of Asia, which connects the East to the West has been in the middle of pissing contest between the United States and China, not to mention their domestic struggle between them and China. If protests for autonomy in Hong Kong continue, and President Trump implements drastic foreign policy measures against Hong Kong, extreme capital outflows may ensue, forcing the Hong Kong Monetary Authority to abandon its peg on the U.S. dollar.
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