- Pensions Secretary Esther McVey and Brexit secretary, Dominic Raab left the UK Cabinet leaving Theresa May’s government into turmoil.
- Arch Brexiteer Jacob Rees-Mogg submitted a letter of no-confidence seeking the ousting of Prime Minister Theresa May.
- May spoke in the UKJ parliament seeking the support for the freshly designed Brexit agreement while EU summit is planned for November 25.
- Failure to find support for the Brexit deal risks Sterling falling to 1.2100, the low from March 2017 when the correction from post-Brexit slump started.
Sterling is hammered lower on Thursday after the Brexit agreement proposal found a tough opposition in both the UK parliament with the UK Cabinet dismantling as Pensions Secretary McVey and Brexit Secretary Raab both stepped down.
“Today, I have resigned as Brexit Secretary. I cannot in good conscience support the terms proposed for our deal with the EU,” Dominic Raab said on Thursday morning indicating that there is an ongoing dispute within the UK Cabinet about the Brexit deal.
Later on Thursday, the pensions Secretary Esther McVey joined Raab in resignation and after the UK Prime Minister May spoke to members of parliament the ultra-conservative party member Jacob Rees-Mogg submitted a letter seeking no-confidence vote for Theresa May.
The negative market sentiment in the epicenter of Brexit news combined with thin market liquidity and resulted in a massive Sterling’s depreciation towards 1.2770 with further scope for depreciation should the UK parliament fail to approve the Brexit deal or Theresa May’s government fall prey of ultra conservatives and face a new leader election.
The GBP/USD currency pair continues to build a base just below the downward sloping trend on a daily chart. The daily swings are massive over the course of last three days with daily ups and downs framed by 1.2750 on the downside and 1.3070 on the upside while the currency pair settled below 1.2800s. The risk of failing to approve the Brexit deal or Theresa May’s government collapsing is weighing on GBP/USD. Should the uncertainty build up further the GBP/USD is likely to test the cyclical low of 1.2662 and after falling past this level the territory opens for a test of 1.2100 March 2017 low and the cyclical pivot point of Sterling’s appreciation after Brexit related slump. On the other hand, approving Brexit agreement will support Sterling towards 1.3060 and 1.3340 further up.
GBP/USD daily chart
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.