The UK’s political tectonic plates are shifting and the country could have a new Prime Minister in less than a month after Theresa May agreed to discuss the timetable for her departure in early June. This coupled with increasing hostility coming from China in the wake of the US ban on Huawei and the ramp up in sanctions on Iran is keeping the FTSE firmly in the red.

Shares in food delivery firm Just East dropped to the bottom of the FTSE 100 after Amazon agreed to back rival Deliveroo with a round of funding worth $575 million. Smaller rivals Takeaway.com and Delivery Hero were also hit as Amazon positions itself in the fast growing food delivery market with other major contenders like Uber Eats.

Pound nudges lower with politics as the dominant driver

Currency moves are fairly delicate this morning with the pound slightly weaker against the dollar and the euro. The two main prompts for the decline came from economic data showing that car sales in Britain declined by over 4% in April compared with German car sales which were down 1.1%, and from unsuccessful domestic political wrangling.

Theresa May’s talks with Labour seem to be teetering on the brink of collapse hours after the PM agreed to set the timetable for her departure in June. Before that the European elections next week will inject some volatility into currency trading especially as polls show that the Liberal Democrats are in the lead to win the vote, which is seen as the country’s opportunity to show its stance on Brexit.

Oil firmer, possibly for months ahead

Brent crude is again flirting with the $73 mark this morning, trading up 0.37% since the market opened but just a touch below yesterday’s highs. The rising tensions in the Middle East and the drone attacks on Saudi facilities earlier this week are fueling a market which has already been rendered tighter than usual by sanctions on Venezuela and Iran and the disruption of Russian exports because of contamination . Forward prices indicate that the tightness could increase further in the second half of the year.

CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex Analysis

Editors’ Picks

AUD/USD: Weaker below 0.6900 despite upbeat Australian data

Sellers continue to lurk above 0.6900, knocking-off AUD/USD back below the latter, as markets shrug-off upbeat Australian Retail Sales and Trade data. Broad-based dollar bounce and US-China tensions weigh down on the aussie. 

AUD/USD News

USD/JPY: Bullish bias intact while above 21-HMA in potential rising channel

USD/JPY's bullish bias likely remains intact so long as the spot holds above the upward sloping 21-Hourly Simple Moving Average (HMA) support, now at 108.83. The focus now shifts towards Thursday’s US Jobless Claims for the next direction. 

USD/JPY News

Riots could assist US recovery by ending the economic paralysis

The US economy may be headed for a V-shaped recovery aided ironically enough by the demonstrations that have made nonsense of the continued social and business restrictions and the riots whose damage will require massive spending to repair.

Read more

Gold: Bounces back above $1,700 to keep buyers hopeful

Gold prices recover from immediate support line, 50-day SMA. The yellow metal’s failure to close below 50-day SMA, not to forget a six-week-old ascending support line keeps the buyers hopeful. Risk reset, cautious mood ahead of the ECB also favors the buyers.

Gold News

WTI retraces within an immediate triangle around $37.00

WTI seesaws near three-month high inside a two-day-old symmetrical triangle. The black gold rose to the highest since March 11 the previous day but MACD’s weakness dragged it back from $38.30.

Oil News

Forex Majors

Cryptocurrencies

Signatures