Pound Higher Ahead Of May's Confidence Vote
January 15 2019 - 11:38PM
RTTF2
The pound was higher against its most major counterparts in the
early European session on Wednesday, as investors await a
confidence vote on U.K. Prime Minister Theresa May by Britain's
parliament tonight, following a crushing defeat on her Brexit deal
on Tuesday.
The motion is expected to be defeated, as all Conservative and
DUP MPs are expected to support the government and give May her
slim majority in Parliament.
With support for a no deal Brexit appearing quite low in
parliament, markets are now pricing in a higher probability of a
softer or ditched-Brexit altogether.
While European Commission chief Jean-Claude Juncker urged London
to "clarify its intentions as soon as possible", May promised
cross-party talks to try and salvage a workable Brexit deal before
returning with a new proposal next Monday.
Data from the Office for National Statistics showed that UK
consumer price growth slowed to its weakest level in nearly two
years in December, driven by a big fall in fuel prices.
The consumer price inflation eased to 2.1 percent from 2.3
percent in November, in line with economists' expectations.
The input price inflation dropped to 3.7 percent form 5.3
percent in November, in line with economists' expectations. Output
price inflation eased to 2.5 percent from 3 percent and was lower
than the 2.9 percent economists had predicted.
The currency fell against its key counterparts in the Asian
session as a crushing parliamentary defeat for British Prime
Minister Theresa May's Brexit plan reignited worries about global
growth. The pound added 0.8 percent to 140.07 against the yen, from
a low of 138.99 hit at 8:30 pm ET. On the upside, 142.00 is likely
seen as the next resistance for the pound.
Data from the Bank of Japan showed that Japan producer prices
fell 0.6 percent on month in December - missing forecasts for a
decline of 0.3 percent, which would have been unchanged from the
previous month.
On a yearly basis, producer prices were up 1.5 percent - shy of
expectations for 1.8 percent and down from 2.3 percent in
November.
The pound firmed to 1.2748 against the Swiss franc, its biggest
level since December 5, 2018. If the pound rises further, 1.29 is
possibly seen as its next resistance level.
Reversing from an early low of 1.2825 against the greenback, the
pound edged up to 1.2896. The pound may possibly challenge
resistance around the 1.30 area.
The pound appreciated to near a 2-month high of 0.8843 against
the euro and held steady thereafter. The pair was worth 0.8874 at
yesterday's close.
Looking ahead, U.S. import and export prices for December and
NAHB housing market index for January are scheduled for release in
the New York session.
Sterling vs US Dollar (FX:GBPUSD)
Forex Chart
From Apr 2024 to May 2024
Sterling vs US Dollar (FX:GBPUSD)
Forex Chart
From May 2023 to May 2024