GBP still trying to push higher

Published date: 10/09/2019

The UK parliament begins its month-long recess, initiated by Boris Johnson's prorogation which received the Queen's approval a little over a week ago.  Before the suspension of the House of Commons, the PM attempted to vote through an early election yesterday, but despite winning the numbers, he did not get the necessary two thirds to pass the motion as Labour MPs abstained for fear of leaving the door open to government timing, which could have seen the country fall out of the EU without a deal 'accidentally'.    

In the meantime, while Boris Johnson insists that he will not ask for another delay, he will be pushing ahead with negotiations with the EU to try and replace the backstop.  The bill passed last week and given Royal assent on Monday says that no deal will be blocked in the event that a deal is not reached between the UK and EU by the 19th of October.  As such, the next 4 weeks or so will be a busy time for Mr. Johnson as he tries to negotiate improved terms, but with a seemingly diminished hand, now that no deal has been voted against in parliament. 

The odds for a deal (of sorts) have been raised as a result, and by inference, no deal odds have been reduced, and this has given the Pound some fresh support.  However, with uncertainty still very much in the air, the market continues to try and fade the recent strength with Cable sellers notable ahead of the 1.2400 mark.  

EUR/GBP is also finding support in and around the 0.8900 level, despite taking out some technical support around 0.8920.  However, the cross failed to hold below here as sellers attempted to force a stronger sell-off which would have tested yet more demand just under 0.8900.  

Later on this morning, we get the latest employment report, and another set of good numbers could prompt a fresh wave of buying after yesterday's GDP numbers were not as bad as previously feared.


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