GBP Plummets on No Confidence Vote Risk, AUD Slips as Hung Parliament Looms - US Market Open
MARKET DEVELOPMENT – DUP MAY SUPPORT TORY REBEL AMENDMENT
GBP: The Pound is the worst performing G10 currency with losses of 0.9%. Brexit concerns continues to plague the Pound with the latest reports suggesting the DUP would back an amendment currently being tabled by Tory Eurosceptics on Wednesday that would effectively make an Irish backstop illegal. Elsewhere, no-confidence vote risks for PM May are on the rise amid reports that a centrist Tory MP is to send a letter of no-confidence to the 1922 committee. GBP sub 1.30 against the greenback, dropping to a low of 1.2960.
AUD: Australian voters sent a strong message to the governing Liberal party who look set to lose their one-seat majority following the Wentworth by-election. This result was largely in relation to the ousting of the former PM, Malcom Turnbull back in August. While this raises the political uncertainty, it is possible that the Liberal party can see out the rest of their term with a minority government ahead of the Federal elections in May 2019. Australian Dollar continues to hover around the 0.71 handle with buying interest somewhat lacking for the high beta currency.
DailyFX Economic Calendar: Monday, October 22, 2018 – North American Releases
DailyFX Webinar Calendar:Monday, October 22, 2018
GBPUSD: Trader data shows 65.5% of traders are net-long with the ratio of traders long to short at 1.9 to 1. In fact, traders have remained net-long since Sep 20 when GBPUSD traded near 1.30758; price has moved 0.7% lower since then. The number of traders net-long is 0.7% higher than yesterday and 11.7% higher from last week, while the number of traders net-short is 8.7% higher than yesterday and 8.3% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBPUSD prices may continue to fall. Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed GBPUSD trading bias.
Five Things Traders are Reading
- “US Dollar Strength Persists as Euro, Sterling Beset by Headline Risk” by James Stanley , Currency Strategist
- “UK Week Ahead: Tough Week Ahead for UK PM May | Webinar”by Nick Cawley, Market Analyst
- “Q3 Earnings Kicks into High Gear, Relief Rally for Italian Assets”by Justin McQueen, Market Analyst
- “Weekly CoT Update: Speculators Buy Gold at Record Pace, Sell More Euros” by Paul Robinson, Market Analyst
- “EURGBP Price: Facing a Cluster of Resistance Levels” by Nick Cawley, Market Analyst
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.email@example.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.