MARKET DEVELOPMENT – GBP ROLLERCOASTER ON POTENTIAL BREXIT DELAY
GBP: A relatively volatile session for the Pound this morning, which saw a sharp move to session highs amid UK press reports citing Cabinet Ministers that an Article 50 extension is increasing likely. However, this had been quickly ruled out by the PM Spokeswoman who stated that an extension is not government policy. Eyes are firmly fixed on the key Brexit vote on Tuesday, however, expect headline risk to be elevated in the meantime. Of note, following amendments made this week, markets have begun to price out no-deal Brexit risks with premium for GBP puts continuing to pullback.
AUD: Dovish Fed commentary and increased trade war optimism, boosting risk sentiment has been among the major factors supporting both the AUD and NZD. AUDUSD reclaimed the 0.7200 handle for the first time in 3-weeks, however, resistance around 0.7270-80 may curtail further upside.
CNH: PBoC source reports saw USDCNH pare losses, in which the a PBoC Official stated that they do not want a sharp appreciation in the Yuan. The official also added that the current rally could be capped at 6.7.
DailyFX Economic Calendar: Friday, January 11, 2019 – North American Releases
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Four Things Traders are Reading
- “Charts for Next Week: EUR/USD, Yen-crosses, Gold Price, Crude Oil & More” by Paul Robinson, Market Analyst
- “EURUSD Price Outlook: Unable to Make a Decisive Break Higher”by Nick Cawley, Market Analyst
- “Sterling (GBP) Ignores UK GDP Data, Eyes Brexit Bill Vote” by Martin Essex, MSTA, Analyst and Editor
- “AUDUSD Rises on Fed Doves and Trade War Optimism, However, Downtrend Remains Intact” by Justin McQueen, Market Analyst
--- Written by Justin McQueen, Market Analyst
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