Pound Steadies as Markets Await Key Vote – 14 September 2020

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EU officials have already warned that they would not trust a government that would willing break a negotiated agreement and, should the bill pass, Britain will likely find itself without a trade deal.

BrexitAhead of an important vote on the Brexit, the Pound Sterling steadied against its two main rivals, the greenback and the Euro. Last week, the Pound had recorded its worst week of trading in six months, largely a result of growing pessimism from investors on mounting concerns over a no-Brexit outcome at the end of this year. The British government last week proposed new legislation that would intentionally breach some sections of the January Withdrawal Agreement. The bill will be voted on some time day in the UK Parliament. EU officials have already warned that they would not trust a government that would willing break a negotiated agreement and, should the bill pass, Britain will likely find itself without a trade deal.

As of 10:54 am in London trading, the EUR/GBP was trading lower at 0.9228 Pence, down 0.2885% and off the session peak of 0.92736 Pence. The GBP/USD was higher at $1.2848, a gain of 0.3946%; the pair has ranged from a low of $1.27707 to a peak of $1.28636 in today’s trading day.

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With no meaningful fundamental data for the UK today, market players will look to the Parliamentary vote, and then on to tomorrow when UK labor data will be released. The UK’s Office of National Statistics will be releasing the 3-month unemployment rate through to July, with analysts predicting it will be unchanged at 3.9%. Average earnings is likely to show a slight improvement, at least from the latest polls, with average earnings including a bonus predicted to come in at -1.1%, off the the -1.2% of the last reading. Average earnings without a bonus for the 3-month period ended July is predicted at -0.6%, from the previous reading of -0.2%.

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