Brexit Latest Sours Financial Markets as Pound, Stocks Wobble The British Pound was the worst-performing major currency on Tuesday as it became more evident that the October 31 Brexit deadline was put into question. As John Bercow – Speaker of the House – put it, that left Brexit “in limbo”. Thus, the government sought to delay the EU-UK divorce and requested it from their colleagues across the English Channel. Donald Tusk – President of the European Council – recommended the EU to accept the UK’s extension request.
A couple of options include delaying to January 31, or a shorter one to November 30. In an official statement from France, the country noted that a Brexit extension to gain time “must be excluded” as they are open to a short technical delay. However, a UK official briefed that a push back until next year would mean an early election. The numerous uncertainties here not only took their toll on the British Pound, but also on risk trends.
On Wall Street , the S&P 500 turned red amid these developments and ended the day 0.36 percent to the downside. Near-term focus on earnings season was overshadowed. Wednesday’s Asia Pacific Trading Session Another quiet economic calendar docket puts the attention for currencies on risk trends. With S&P 500 futures pointing decidedly lower, this could spell further weakness in the AUD and NZD .
This would bode well for the Japanese Yen. Overnight, EUR/USD turned lower following a bearish candlestick pattern . British Pound Technical Analysis Focusing on the GBP/ USD daily chart, prices turned lower after failing to breach near-term resistance at 1.3001. Still, immediate support held at 1.2866.
This is as IG Client Sentiment showed a cautious uptick in GBP/USD net-long positioning . While the current contrarian outlook is mixed, keep an eye out for a pickup in upside bets.
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