With a lack of data ahead of tomorrow’s Non-Manufacturing figure from the States, markets are likely to once again shun fundamental data and technical analysis in favour of political sentiment.
Mondays US vs China currency war is indicating that the markets are in a state of hyper sensitivity, and any announcements or speeches made by political leaders or those of economic influence are likely to create volatility as speculative traders attempt to break down the underlying rhetoric. The ECB’s Benoit Coeure’s announcement earlier this morning carried no such implication.
Yesterday the Peoples Bank Of China stopped its currency from further ‘losses’ after Mondays major market manoeuvre became headline news. As a result the daily currency fixing for the Yuan against the Greenback was back above 7- a stronger adjustment than predicted by analysts.
Unfortunately; although stocks did recover, this trade battle leads watchers to believe the chances of a trade war resolution are dissipating.
GBP/USD – Spent the majority of its day ranging between 1.2140 and 1.2210. Suggesting minor support and resistance at these levels.
GBP/EUR – Had a strong Asian session, gaining form 1.0810 before finding resistance at 1.0920.
EUR/USD – Spent much of the day either caught between the 1.1170-12150 range or in a negative retracement.
Back in Europe, where the buzzword becomes Brexit, it transpires that the remain camp are plotting to bring down Boris in favour of a unity prime minister, then call an election. This will be a figurehead that will govern multiple parties, whom intends to avoid a hard Brexit at all costs. This came to light after mounting rumours the PM faces a vote of no confidence if he continues down the no deal highway.
Unsurprisingly, reports claim Boris will refuse to resign should such an outcome become a reality.