There’s been more upside seen in sterling this morning with the pound building on Tuesday’s appreciation and trading not far from a 3-week high against the US dollar. While this short-term move is welcome, the longer-term direction of the pound remains heavily reliant on what happens next with Brexit and there remains a feeling that the market is underestimating the risk of a no-deal scenario. Boris Johnson, the heavy favourite to become the next PM has promised to take Britain out of the EU with or without a deal on October 31st, and if he is as good as his word then the risk of a no-deal is rising. After MPs effectively blocked the threat of a no-deal a few months back the pound rallied as traders began to see Theresa May’s deal as the worst-case scenario. However, given the time restraints until the end of October, this outcome or a similar variation is now looking like the best possible outcome and as such could well provide a ceiling to any significant moves higher in the pound for the foreseeable future.

Cabinet note warns UK not ready for no-deal

A leaked cabinet memo this morning has served as a timely reminder of the disruption that would ensue in a no-deal Brexit, with the document reaffirming the notion that the UK is still far from ready for this eventuality. The note suggests that the government needs 6-8 months of engagement with the pharmaceutical industry to ensure stockpiles of medicines are in place and at least 4-5 months to mitigate disruption caused by border checks. Even if plans were put into place at this very moment it would be touch and go whether they would be sufficient to minimize disruption, and with these contingencies unlikely to being for at least a month there is a sense that time is getting away the best we can hope for is damage limitation.

Oil back under pressure

After a relief rally last week that saw a strong bounce higher in the price of crude oil, the market is coming back under pressure with international benchmark Brent lower for the 3rd day in a row and not too far from the 4-month low made last Wednesday. The oil price is lower by more than 2% on the day following an unexpected build in last night’s API inventory data from the US which showed an increase of 4.9M barrels in the past week. This afternoon the more widely viewed government data will be released and if there is a similar size increase then we could well see a retest the recent lows and drop back below the $60 per barrel mark.

CFD’s, Options and Forex are leveraged products which can result in losses that exceed your initial deposit. These products may not be suitable for all investors and you should seek independent advice if necessary.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD struggling to hold onto 1.10 as USD gains ground

EUR/USD is trading close to 1.10, as the US dollar gradually advances. Two White House advisers expressed contradicting accounts of US-Sino trade talks, causing confusion. Germany refrained from adding fiscal stimulus.


GBP/USD trades around 1.25 as EU pours cold water on Brexit hopes

GBP/USD is trading around 1.25, off the two-month highs of 1.2582 as EU officials cast doubts about the seriousness of the new UK proposals on Brexit. 


USD/JPY drops to one-week lows on trade war headlines

The USD/JPY fell during the American session following reports that the Montana Farm Bureau said China's delegation has canceled a planned trip to view US agriculture.


Top 3 price prediction Bitcoin, Ripple, Ethereum: Ethereum points to the Moon as Bitcoin takes a break

ETH/USD exceeds $220 and is bidding to lead the market. Bitcoin sets a bear trap and recaptures $10,000. XRP stalls between technical levels and fails to consolidate $0.30.

Read more

Gold climbs further beyond $1500 mark, lacks follow-through

Gold edged higher for the second consecutive session on Friday, albeit remained well within a familiar trading range held over the past two weeks or so.

Gold News

Forex Majors