Sterling gains as the UK Supreme Court rule that parliamentary prorogation was unlawful..

The dollar was undermined by weaker than expected data and a dip in yields with an impeachment investigation against President Trump also undermining sentiment.

The Euro failed to take advantage with EUR/USD making little headway as German yields also declined.

Equity markets registered net losses with reservations over underlying US-China trade developments. Demand for the Japanese yen and Swiss franc remained firm amid fragile risk conditions.

Sterling secured net gains as the UK Supreme Court rule that parliamentary prorogation was unlawful which curbed fears over a ‘no-deal’ Brexit to some extent.

Oil prices lost ground due to demand fears and an unexpected API inventory build.
Precious metals were boosted by solid underlying demand amid weaker risk appetite before a slight correction.

Bitcoin declined very sharply to 3-month lows and dragged wider cryptocurrencies lower.

EU Chief Negotiator Barnier reiterated that there was no reason for optimism that the UK can find a solution to the backstop.

The UK Supreme Court ruled unanimously that the government prorogation of parliament was unlawful and the move was void. House of Commons Speaker Bercow stated that normal business would resume on Wednesday.

Markets considered that the potential for a ‘no-deal’ EU departure on October 31st had lessened which pushed Sterling higher, although there were still very important concerns over underlying uncertainty and tensions. There was also a decline in Sterling volatilities following the Court decision with markets monitoring the next political moves.

According to the CBI, industrial output was unchanged in the three months to September, but the index of incoming orders declined to -28 from -13 previously. Export orders deteriorated further and companies were less confident in the outlook.

Political considerations dominated with Sterling holding net gains, although GBP/USD was unable to break above the 1.2500 and retreated to 1.2460 on Wednesday as GBP/EUR held just above 1.1300 with further choppy trading inevitable.

Economic Calendar

07:00German GfK Consumer Confidence (OCT)9.79.7
07:45Consumer Confidence(SEP)102102
09:00CHF ZEW Expectations(SEP)--37.5
11:00CBI Distributive Trades Survey(SEP)-11-49
12:00USD MBA Mortgage Applications--0.10%
15:00USD New Home Sales Change(AUG)--12.80%
15:00USD New Home Sales(AUG)-653M
15:30USD Crude Oil Inventories-0.768M1.058M

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.