Political tensions surrounding Brexit remained extremely high during Friday and continued to dominate market sentiment.

Political tensions surrounding Brexit remained extremely high during Friday and continued to dominate market sentiment.

The dollar lost ground on Friday amid speculation over a slightly less hawkish Fed stance following some caution on global conditions from the vice-chair and regional Fed Presidents.

Commodity currencies and precious metals made net gains amid a softer dollar The Euro registered net gains despite underlying political concerns.

Sterling remained under pressure on Brexit concerns, although it resisted further losses against the dollar as there was no immediate no-confidence vote on Prime Minister May.

Global equities were mixed with some resilience in Asia on Monday despite increased US-China tensions.

Cryptocurrencies failed to make headway with Ether at 16-month lows on Monday.

Political tensions surrounding Brexit remained extremely high during Friday and continued to dominate market sentiment. There was some relief that there were no further ministerial resignations as Environment Secretary Gove decided to remain in office. There was also no immediate no-confidence vote in Prime Minister May, although reports suggested that the number of no-confidence votes was close to the 48-threshold needed to trigger a ballot. Further meetings were planned over the weekend as those MPs looking to derail the withdrawal deal attempted to strengthen their position.

GBP/USD recovered with a close just above 1.2800, although this was primarily a function of US weakness and EUR/GBP advanced to the 0.8900 area. Over the weekend, EU Chief Negotiator Barnier stated that the transition period could potentially be extended until the end of 2022, although the domestic political situation remained the main focus with several members of the Cabinet looking to improve the agreement and provide further details of the future arrangement before the November 25 EU summit.

GBP/USD held above 1.2800 on Monday as political tensions remained extremely high with GBP/EUR just below 1.1250 as weak Rightmove data increased concerns over the housing sector.

Economic Calendar

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15:00 USD NAHB Housing Marketing Index 68 68
15:45 USD FOMC Member John C. Williams Speech - -

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