Sterling gains on Prime Minister May’s commitment to resign if the Withdrawal Agreement is approved, reversed rapidly after the DUP reiterated opposition and deadlock persisted.

Global bond yields declined further on Wednesday amid negative sentiment on the global growth outlook. The yen and Swiss franc gained significant ground on defensive grounds.

The Euro came under fresh pressure on underlying growth fears and dovish rhetoric from ECB President Draghi.

The US dollar made headway amid a lack of alternatives, but lower yields undermined support on Thursday and commodity currencies secured a tentative recovery.

Sterling gains on Prime Minister May’s commitment to resign if the Withdrawal Agreement is approved, reversed rapidly after the DUP reiterated opposition and deadlock persisted.

Oil prices dipped on demand concerns and higher inventories, but with support on dips. Precious metals registered net losses with gold unable to secure strong defensive support.

The latest CBI retail sales survey declined sharply to a reading of -18 for March from zero the previous month and was well below consensus forecasts, although companies were expecting a stronger performance for April.

Sterling was again subjected to choppy trading ahead of the New York open as political developments dominated with GBP/USD fluctuating near 1.3200.

After a meeting with Conservative backbench MPs, Prime Minster May stated that she would resign if the House of Commons backed the government’s Withdrawal Deal and let another person lead the second stage of negotiations. May’s comments increased speculation that enough members would switch sides to support the agreement and Sterling moved higher with GBP/EUR rising above 1.1750.

There was GBP/USD selling above 1.3250 and Sterling dipped sharply again after the DUP maintained their opposition to the Brexit deal. None of the indicative motions gained majority support in the House of Commons which triggered further losses. GBP/USD declined to lows below 1.3150 before regaining some ground given underlying opposition to a ‘no-deal’ Brexit while the Euro remained fragile and GBP/EUR settled around 1.1700.

Economic Calendar