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GBP Plummets on Brexit Jitters

Published October 9, 2019

Kiwi remains subdued and opens this morning towards the bottom of a 20-point overnight range at 0.6299. Due to a lack of significant local data releases, we have struggled to make any headway this week.
We are up nominally on the crosses at today’s open, but well within the weeks ranges vs AUD, GBP and EUR.

Elsewhere, the USD posted one-week highs on a trade weighted basis overnight, ticking up on news that the US was blacklisting several China based technology companies who, the US alleges, facilitated in human rights abuses. This has accelerated concerns around this week’s China-US trade talks which are set for Thursday and Friday this week.

GBP was hammered overnight plummeting to 1 month lows vs the USD as news emerged that any deal based on the UK’s most recent Brexit proposal was “overwhelmingly unlikely” which effectively means that Boris will not have a deal in place by the deadline on October 19th, the circus continues.

Expect the back end of the week to mirror the front, as far as the FX markets are concerned, a continuation of ambiguous direction across the board with a dearth of data, until perhaps Friday when Unemployment and CPI numbers come out in the US.