Is the Market Bored with Brexit?

by Sep 26, 2019Market Reviews

The Supreme Court ruled that the decision of Boris Johnson to prorogue Parliament this month lacked reasonable justification, strengthening the pound. However, the Pound sterling has still been under fresh pressure on rising concern over the Brexit limbo. The PM Boris Johnson told MPs on Wednesday that he would not commit to seek for a Brexit extension, calling it the surrender act.

“UK politics remains the centre of attention in sterling markets. While the pound was initially lifted by the Supreme Court ruling, it has settled lower again on market perceptions that uncertainties about outcomes remain high and all possibilities are still on the table” says Hann-Ju Ho, Economist with Lloyds Bank.

GBP/USD Hourly Chart

The GBP/USD reached the highest level at 1.24984 after the release of the Supreme Court decision but stumbled to the lowest level at 1.23442 on the next day 25th September. There has been no sign that the pound sterling will gain its rising momentum and has been still below the level before the Supreme Court’s decision.
With a break of the 1.23 mark, further momentum could carry the Pound lower against the US Dollar, with the next key support sitting at the 1.2230 area. The deadline for Brexit is on the 31st October, which Boris Johnson wishes to stand by.

 

 

Blacklisted

Blacklisted

The United States blacklist has gained eight new Chinese technology companies, added to the list on Monday under the Trump administration. The White House accused these eight tech companies of being implicated in human rights violations against Muslim minorities in China’s far-western province of Xinjiang. Two of the companies included on the list are Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co. both companies specialize in video surveillance, that controls nearly a third of the global market for video surveillance, with their cameras all over the world. With China’s Vice Premier Liu He scheduled to arrive in Washington for high-stakes trade talks being viewed by financial markets around the world, the timing for these blacklisted companies seem less than ideal.
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GBP falls as Brexit Talks near Collapse

GBP falls as Brexit Talks near Collapse

Following reports pointed at an imminent breakdown in Brexit talks on Tuesday, the British pound fell over 0.6 % to the lowest level in months, $1.22. Prime Minister Boris Johnson told German Chancellor Angela Markel that a Brexit deal is next to impossible if the European Union wants Northern Ireland to stay in the customs union. With news emerging that the British Government is preparing for the talks to collapse as progress over the last few weeks have been minimal. At writing, the GBP/USD is currently trading at the 1.22231 mark, testing a key support area established way back in early September. We could see a rejection at this support followed with a move to the upside, as a consolidation zone appears to be forming between the 1.22 support and 1.23 resistance areas.
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NZDUSD stages recovery

NZDUSD stages recovery

First of all, according to the newest US ADP report, private business in the United States hires 135 thousand workers in September, which is lower than expected. Also, ISM is a signal for the manufacturing industry shrinking. People worried about the US overall economy. Moreover, the US Dollar Index drops over 99 marks. Secondly, The EU and the United States have threatened to impose tariffs on imported products. The United States will impose a 10% retaliatory tariff on EU aircraft and a 25% retaliatory tariff on agriculture and industrial products. The pessimism environment of global trade, especially between EU and US, benefits for kiwi dollar. Finally, Chinese holiday results in a lack of key data of business and trading activities. Therefore, it makes Asian business under pressure. However, the USD is weak that makes NZD going forwards.
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