Currency Feed – Tuesday 12th September

Repeal Bill vote lifts the Pound  The Pound was stronger this morning following British lawmakers’ decision to approve Theresa May’s EU Repeal Bill. The Bill will allow May’s government to enshrine European Union law as they wish, without having to consult the House of Commons. This, to increase the speed at which British law could […]

12th September 2017 | Miles Eakers

Repeal Bill vote lifts the Pound 

The Pound was stronger this morning following British lawmakers’ decision to approve Theresa May’s EU Repeal Bill. The Bill will allow May’s government to enshrine European Union law as they wish, without having to consult the House of Commons. This, to increase the speed at which British law could be passed ahead of the Brexit deadline of March 2019.

This move was largely priced in yesterday, as expectations emerged that Theresa May believed that she would secure victory in a vote that would have brought about “Brexit chaos” if the opposition prevailed.

The Dollar continued its sell off this morning despite UN sanctions imposed on North Korea last night. The sanctions stopped short of an oil embargo on the Peninsula and freezing Kim Jon Un’s assets, which the US were pushing for, to limit the power of Kim Jong Un’s rogue nation state.

The UN did, however, cut petroleum imports and ban textile exports to limit the amount of hard cash that North Korea can use to fund their military base. It appears North Korea will now target cryptocurrencies, such as the Bitcoin, to expand their military base.

The Euro sold off this morning as French Prime Minister Emmanuel Macron faces a push back from Unions against key labour reforms. The wide scale strike of 180 demonstrations and 4,000 people, is reflective of Macron’s dive in opinion polls on several fronts. Risk concerned with the Catalan referendum, where Catalonia are looking to break away from the rest of Spain in a Scotland-UK like referendum, continue to persist.

Safe haven assets continued to lose ground overnight as global equity markets continued to push higher. Fear of the North Korean tensions escalating have for now subsided and the damage from Hurricane Irma is now expected to be less than previously predicted. The FTSE is set to gain 16 points and the DAX to add 25. Gold slipped 0.2% to $1,323 and Oil also gave back recent gains dropping 0.2% to $53.74.

EUR/USD $1.1969 (+$0.0018)
 

EUR/USD is posting a modest gain ahead of the European open having risen to a fresh daily high of $1.1974 in recent trade. The US Dollar has firmed into the Wall Street close yesterday and overnight in Asia but does appear to have run out of steam this morning. News that the US Security Council have approved new sanctions on North Korea may be providing a weight as could reports that Trump is considering a more aggressive stance on Iran. Fresh impulses for the Euro meanwhile have been limited with investors looking ahead to a speech by ECB Vice President Constancio later today. From a technical view, we look for resistance at yesterday’s high at $1.2039 and Friday’s high at $1.2092. On the downside, the overnight low at $1.1944 and last Wednesday’s low at $1.1901 are in focus. 

 
GBP/USD $1.3190 (+$0.0028)
       

GBP/USD is higher this morning having found some further upside in recent trade and risen to a fresh daily high of $1.3195. Sterling has been boosted by the news that the UK government’s EU repeal bill has passed its first parliamentary vote. The US Dollar meanwhile did firm into the Wall Street close yesterday and overnight in Asia but does appear to have run out of steam this morning. News that the US Security Council have approved new sanctions on North Korea may be providing a weight as could reports that Trump is considering a more aggressive stance on Iran. Above today’s high, we look for resistance at yesterday’s/Friday’s highs at $1.32222/24 followed by the August 3rd high at $1.3264. On the downside, Friday’s low at $1.3091 and Wednesday’s low at $1.3016 are in focus.

 
USD/JPY ¥109.49 (+¥0.10)
 

USD/JPY is little changed ahead of the European open although an earlier gain did take the pair to a fresh one-week high at ¥109.58. US government bond yields are trading at session highs and this will be providing some support to the pair while calls for a positive European cash equity open will be limiting demand for the safe-haven Yen. From a technical  view, today’s low at ¥109.26 and yesterday’s low at ¥108.12 may offer support while on the upside we look for last Monday’s high at ¥109.92 and the prior Friday’s high at ¥110.41.

 
GBP/EUR €1.1016 (+€0.0005)
 

GBP/EUR is a touch higher ahead of the European open. Today’s high at €1.1023 is the best level for the pair since August 17th with the pound finding some upside overnight after the UK government’s EU repeal bill passed its first parliamentary vote. Fresh impulses for the Euro meanwhile have been limited with investors looking ahead to a speech by ECB Vice President Constancio later today. UK inflation figures are also due at 09:30 BST. From a technical view, yesterday’s low at €1.0953 and Friday’s low at €1.0864 may offer support while on the upside we look for the August 17th high at €1.1032 and August 15th high at €1.1048.

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