Forex today: GBP/USD takes a hammering on hard Brexit hysteria

  • GBP/USD slides 160 pips overnight on hard-Brexit concerns. 
  • US Dollar scores a fresh high on the 98 handle ahead of the Fed. 

Forex today was relatively subdued bar a massive washout of stops in GBP/USD that saw the pair endure one of its biggest one-day drops since the Brexit referendum. Elsewhere, the Dollar was sitting on the porch of the 98 handle for the majority of the day, nudging up to a two-month high and printing a low of 97.90. As for US yields, the US 2-year treasury yield drifted sideways between 1.84% and 1.85%, while 10-year yields ranged between 2.05% and 2.07% as the market continued to price ina 30bp of easing at this week's meeting. 

No-deal Brexit risks continue to grow. "Newly installed UK PM Boris Johnson said he would not commence talks with EU leaders until they first agreed to reopen the deal struck with predecessor PM May, and scrapped the backstop guarantee for the Irish border. Senior UK officials also said that ministers were “turbo-charging” no-deal preparations," analysts at Westpac noted. 

Meanwhile, over in Europe, analysts at ANZ Bank noted that EU officials maintained that the deal they struck with Theresa May is not up for negotiation, and the Irish backstop provision won’t be removed. "An opinion poll in Ireland showed that only 43% of the population support Irish PM Varadkar’s position on Brexit and the Northern Ireland backstop."

As for US data, the Dallas Fed manufacturing index soared back for the month of July to -6.3 from -12.1 although remains well down on the thirteen-year highs hit in mid-2018. Nevertheless, the Federal Reserve decision is likely to have considered the number of positive data releases since its last meeting, with jobs, CPI and GDP all lined up for a positive input for the second half of the year and the risk here is on the consumer. Inflation could run sky-high if the Fed acts too aggressive so soon, so a hawkish cut could be on the cards which mean more upside for the Dollar. 

Currency action

As for individual currency performance overnight, analysts at Westpac summarised as follows: 

  • The US dollar index is up 0.1% on the day, nudging up to a two-month high. 
  • EUR rose from 1.1115 to 1.1149. 
  • Underperformer GBP fell from 1.2365 to 1.2212 – a two-year low – as new UK PM Johnson stepped up preparations for leaving the EU without an agreement. 
  • USD/JPY rose from 108.60 to 108.90. AUD slipped further, from 0.6910 to 0.6895 – a one-month low. 
  • NZD similarly made a fresh multi-week low at 0.6616. 
  • AUD/NZD ranged between 1.0405 and 1.0435.

Key notes from Wall Street:

Key events ahead:

The Bank of Japan policy meeting is widely expected to be on hold.  

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD losses 1.1900 amid dollar’s comeback

EUR/USD has extended its gains, nearing 1.1950, but quickly turned negative now trading around 1.1880. The greenback recovers as equities fall as the market’s sentiment turns sour.


GBP/USD retreats from daily highs, holds around 1.3350

GBP/USD retreats from near 1.3400, partially undermined by Brexit woes but mostly on renewed dollar’s demand. Doubts arise about Chief EU Negotiator Barnier traveling to London.


XAU/USD trades with modest gains above $1810 level, lacks follow-through

A softer tone surrounding the USD assisted gold to gain some traction on Thursday. COVID-19 vaccine optimism might cap the upside for the safe-haven precious metal. Holiday-thinned liquidity warrants some caution before placing fresh directional bets.

Gold news

US Thanksgiving Wrap: Consumers carry October, November starts to look dicey

A triple dose of US data on Wednesday before the Thanksgiving holiday confirmed the strength of the consumer recovery even as employment problems again loom from the rising numbers of Covid-19 closures across the country.

Read more

Black Friday 2020 Discounts!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info