Sterling collapses as Boris Brexit plan sends shockwave through the market.
Sterling slumped to a 28-month low against the U.S. dollar as Boris Johnson led government increased the heat on Brexit suggesting a “no-deal” Brexit is at its highest probability.
The level of Sterling-Dollar had fallen to 1.2125, a decline of 1.9% on the day. Given GBPUSD closed on June 22, 2016 (the day before the EU referendum) at 1.4708 when the U.K. voted to leave the EU, Sterling has declined by 16.88% against the U.S. dollar since then. This emphasises the point, since Johnson landed the prime minister role on July 24, Sterling is the worst-performing currency in the world. Against a basket of global currencies, the Sterling Index has fallen by 2.13%.
It is apparent that Sterling is highly likely to book further declines as the sentiment in the market would appear to be abandoning any hope that a last-minute deal will be reached come October 31st. Michael Gove, who has been given the responsibility of preparing the U.K. to prepare for no-deal, has said the U.K. government is currently “working on the assumption” of that very outcome.
The Prime Minister is also refusing to sit down for talks with EU leaders until they agree to ditch the Irish backstop from the Brexit withdrawal agreement, despite invitations to meetings from the German chancellor, Angela Merkel, and the French president, Emmanuel Macron. His official spokeswoman said the prime minister had made clear that he wanted to strike a deal, but that there was no point in holding face-to-face talks unless the EU agreed to reopen the agreement.
Boris trip to Scotland yesterday also backfired as the threatening Rally of a No-deal Brexit was met with jeers and boos from the Scottish supporters. The heightening threat of A No-Deal Brexit has bolstered Nicola Sturgeons case for a new vote on Scottish Independence.
The PM today Visits Wales to try and ramp up support.
Economic Calendar
| Expected | Previous | ||
|---|---|---|---|
| 6:30 | GDP Growth Rate QoQ Prel Q2 | 0.30% | 0.3% |
| 7:00 | GfK Consumer Confidence AUG | 9.8 | 9.8 |
| 10:00 | Business Confidence JUL | 0.08 | 0.17 |
| 10:00 | Economic Sentiment JUL | 102.5 | 103.3 |
| 10:00 | Industrial Sentiment JUL | -7 | -5.6 |
| 10:00 | Services Sentiment JUL | 10.5 | 11 |
| 10:30 | Unemployment Rate Q2 | 27.80% | 27.6% |
| 11:15 | Business Confidence JUL | -4 | -3.7 |
| 1:00 | Inflation Rate YoY Prel JUL | 1.50% | 1.6% |
| 1:30 | Personal Income MoM JUN | 0.30% | 0.5% |
| 1:30 | Personal Spending MoM JUN | 0.30% | 0.4% |
| 1:30 | PCE Price Index MoM JUN | 0.30% | 0.2% |
| 1:30 | PCE Price Index YoY JUN | 1.70% | 1.5% |
| 2:00 | S&P/Case-Shiller Home Price YoYMAY | 2.30% | 2.5% |
| 2:00 | S&P/Case-Shiller Home Price MoMMAY | 0.50% | 0.8% |
| 3:00 | Pending Home Sales MoM JUN | 0.70% | 1.1% |
| 3:00 | Pending Home Sales YoY JUN | 1.50% | -0.7% |