Pound Falls Ahead Of Two Crucial Brexit Votes
October 22 2019 - 2:16AM
RTTF2
The pound declined against its most major counterparts in the
European session on Tuesday, as the U.K. parliament is set to
debate and vote on Johnson's Brexit deal, after being denied
twice.
Lawmakers will vote on Johnson's so-called Withdrawal Agreement
Bill and then on the government's tight timetable for approving the
legislation.
Speaking to the European Parliament in Strasbourg, European
Council President Donald Tusk told that he would decide on the UK's
request for a Brexit delay in the coming days.
Data from the Office for National Statistics showed that the
U.K. budget deficit for September increased for the first time in
five years.
Public sector net borrowing excluding banks increased by GBP 0.6
billion from last year to GBP 9.4 billion in September. This was
the first September year-on-year increase for five years.
Borrowing in the current financial year-to-date was GBP 40.3
billion, which was GBP 7.2 billion more than in the same period
last year.
Survey results from the Confederation of British Industry showed
that UK manufacturing output continued its downturn in three months
to October reflecting sharp decline in the auto sector.
According to the Industrial Trends survey, the balance of output
volume decreased to -10 percent from +1 percent in September.
The pound fell to 140.21 against the yen, from a high of 141.11
hit at 9:15 pm ET. If the pound falls further, 139.5 is seen as its
next support level.
After rising to 1.2987 against the greenback at 11:00 pm ET, the
pound reversed direction, reaching as low as 1.2922. The pound is
seen finding support around the 1.28 level.
The pound reversed from an early high of 0.8587 against the
euro, falling to 0.8620. Next key support for the pound is seen
around the 0.88 level.
In contrast, the pound bounced off to a 5-day high of 1.2824
against the franc, from a low of 1.2761 seen at 3:30 am ET. The
pound may possibly face resistance around the 1.31 level.
Looking ahead, Canada retail sales for August and U.S. existing
home sales for September will be featured in the New York
session.
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