Sterling week ahead, Pound nose-diving to multi-months low
- The British lawmakers are seeking full legal disclosure of the Brexit draft, as a tempestuous sterling week is straight ahead
- If Brexit vote failed to pass in the House of Commons, a no-deal or no-Brexit is highly likely, which would jolt the GBP downwards
- British Parliament is hanging on a tangible balance, as it lacks only 7 lawmaker’s votes, which could well experience a flip-flop at the last moment, exhorting a GBP soaring
After today’s Asia Pacific session, the sterling is again on the back foot and lowering against a range of currencies. However, during the morning session, GBP was up residing safely over 1.2800 region, as the American Dollar was softening and Oil was soaring, as G20 summit ends up with a trade truce.
The high-stake meeting between the US president Donald Trump and Chinese President Xi Jinping, have at last conceived fruit and resulted in a momentary trade truce, according to which, the US administration will not impose the much-debated tariff rate hike from January 1stand the tariff would remain at 10% over around $200 billion worth of Chinese goods. Before the G20 summit, the market sentiment had been heavily battered, in the wake of an emerging threat of rate hike to 25% to current 10%. In fact, in a press conference after G20 summit, the White House made a statement saying that, they would not be hiking the tariff rates over the Chinese goods.
Followed by the press conference, the American Dollar was softening and reigning below 96, however, it is again back on bullish course and residing over 96.40, while the pound sterling slipped again, lying over 1.2740. Euro has also taken a tumble and has been residing at 1.1356, while in the morning session, it was again looking to test the 1.1400 region.
Tomorrow, the UK data might take a backseat along with GBP, as BoE governor Carney would have to answer some tricky questions during his speech in British Parliament. The latest BoE inflation outlook will be released o Friday, ahead of US non-firm payroll day and a highly volatile GBP market trend is expected all over the week.
GBP/USD daily price chart
In the face of BoE governor Carney’s speech on British parliament tomorrow, GBP might take further tumbling. However, any positive Brexit news would result in a GBP surge and negative Brexit headlines would result in a momentary loss. However, as GBP is still holding on to its key support level, heavy downfall is not expected and British parliament is supporting the GBP client sentiment well, as Brexit is just 7 votes lacking in the House of Common, where a multiple small parties opposing the Brexit draft and a mutual agreement with any of the parties would cause a last moment flip-flop, passing the Brexit deal through the House of Commons, and GBP outlook appears to be exhortative and a bullish bias might have been upcoming, with investors are eyeing on a buying position for GBP/USD pair.
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[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]