GBP: Moving from dystopia to normality but expect a noisy week of speeches - ING

Sandeep Kanihama FXStreet Contributor

Viraj Patel, Research Analyst at ING, explains that it’s clear to them that the weak and almost ‘half-life’ like pound is looking for any positive reason to transform into a better version of its self, with the currency’s resilience of late indicative of a different Brexit trading environment relative to the more dystopian-like one observed over 2017.

Key Quotes

“Part of this new environment is seeing GBP investors opting to trade off Brexit facts rather than Brexit speculation – with the latest CFTC positioning data showing that real money investors did not add to their net short GBP bets, despite the prospect of heightened Brexit uncertainty in the coming weeks.”

“Such context is important ahead of what is seemingly a pivotal week of Brexit speeches for GBP markets – with both opposition Labour leader Jeremy Corbyn (today) and Prime Minister Theresa May (Friday) set to lay out their respective visions for the future UK-EU trading relationship. ‘Customs union’ will be the buzzword of the week and it’ll be interesting to see whether Labour’s position of ‘full tariff-free’ access to EU markets – which would be the effective consensus within the House of Commons – would force the PM to seek a similar free-trade agreement. Still, while one can expect a lot of Brexit huffing and puffing this week from UK politicians, real money GBP investors will wait for the facts – and here the European Commission’s response to PM May’s speech may be equally as important. Expect some choppy GBP trading – with the risks modestly tilted to the upside. GBP/USD supported above 1.40; EUR/GBP risks to 0.87 this week.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD struggles to regain momentum in the low1.1600s

EUR/USD is giving some signs of life in the aftermath of two severe days of losses on Wednesday, reclaiming the 1.1600 hurdle and above on the back of the resurgence of a mild selling bias around the US Dollar. Moving forward, the usual US weekly Claims will take centre stage on Thursday ahead of Friday’s crucial NFP data.

GBP/USD appears bid around 1.3370

GBP/USD reverses part of its recent multi-day decline, gathering some balance and managing to reach the 1.3400 region, where some initial resistance seems to have turned up. Cable’s uptick comes in response to some loss of momentum in the Greenback despite the geopolitical scenario remaining fragile.

Gold recovers modestly despite intensifying Middle East crisis

Gold keeps its daily gains well in place, although a break above the $5,200 mark per troy ounce still remains elusive on Wednesday. The yellow metal’s rebound comes in response to the persistent flight-to-safety amid intense geopolitical tensions in the Middle East and the bearish performance of the US Dollar.

XRP rises alongside peers as ETFs attract inflows

Ripple (XRP) is gaining upside momentum, trading above $1.40 at the time of writing on Wednesday. The remittance token is rising in tandem with major crypto assets, including Bitcoin (BTC), which has crossed above the pivotal $70,000 level, and Ethereum (ETH), which is holding above $2,000.

First Venezuela, now Iran: The US-China energy war escalates

At first glance, the latest escalation involving the United States with both Iran and Venezuela looks like another chapter in a long-running geopolitical story. But viewed through a broader strategic lens, something else may be unfolding: Energy.

Bittensor extends recovery despite retail demand slump

Bittensor, a leading Artificial Intelligence token, is aging up above $190 at the time of writing on Wednesday. Steady price increases characterise the broader crypto market, with Bitcoin holding above $71,000 and Ethereum above $2,000.