GBP/USD could trade below 1.27 - TDS

Sandeep Kanihama FXStreet Contributor

Analysts at TD Securities suggest that in the UK, the big vote on Theresa May's Brexit deal takes place tonight (GMT), with the vote happening around 8pm GMT.

Key Quotes

“We expect a significant defeat, with about 70 Conservative MPs not supporting the deal (for a loss margin of around 150, depending on abstentions).”

“We think holding cash positions over the event offers a very poor risk/reward profile. We would rather re-engage once some of these risks subside. Our base case suggests GBPUSD could trade below 1.27 but find buyers ahead of 1.2615.”

“A narrow defeat would boost hopes that eventual passage is still possible and could see spot rally toward 1.32. A crushing blow, in contrast, increases tail risks in both directions with a very volatile reaction in markets likely. Hopes for No Brexit may prevail initially, but the risks of No Deal will also cast a long shadow.”

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 climbs to daily highs on US CPI

EUR/USD now accelerates it rebound and flirts with the 1.1880 zone on Friday, or daily highs, all in response to renewed selling pressure on the US Dollar. In the meantime, US inflation figures showed the headline CPI rose less than expected in January, removing some tailwinds from the Greenback’s momentum.

GBP/USD clings to gains above 1.3600

GBP/USD reverses three consecutive daily pullbacks on Friday, hovering around the low-1.3600s on the back of the vacillating performance of the Greenback in the wake of the release of US CPI prints in January. Earlier in the day, the BoE’s Pill suggested that UK inflation could settle around 2.5%, above the bank’s goal.

Gold: Upside remains capped by $5,000

Gold is reclaiming part of the ground lost on Wednesday’s marked retracement, as bargain-hunters seem to have stepped in. The precious metal’s upside, however, appears limited amid the slightly better tone in the US Dollar after US inflation data saw the CPI rise less than estimated at the beginning of the year.