Further Pound Volatility Likely this Week as Brexit Showdown Continues

. 2 min read

The AUDUSD opens at 0.6847 (mid-rate) and the NZDUSD opens at 0.6378 (mid-rate) this morning.

Brexit headlines continue to dominate markets with the British pound pushing higher into Friday’s close as investors positioned their books for a positive outcome from Saturday’s Brexit deal parliamentary vote.

Unfortunately for Boris Johnson there was yet another twist in the Brexit debate with parliament again refusing to support his leave with or without a deal proposal and instead voting for a further extension beyond the 31 October deadline.

The Letwin amendment which postpones any withdrawal agreement until it is passed into law was voted in on Saturday and forced Boris to go back to Brussels with a letter seeking an extension, in defiance Boris sent an unsigned letter asking for the extension along with another signed letter encouraging the EU to reject the extension.

Pound volatility is likely to continue this week as Boris tries to enforce his Withdrawal Bill with another parliamentary vote expected to take place in the next few days.

In US economic news, the Conference Board reported leading economic index edged down by 0.1% in September after dipping by a revised 0.2% in August. The result surprised economists who had expected the index to rise by 0.2% and puts further pressure on the Fed to cut rates more aggressively.

With little in the way of domestic data releases over the course of the week AUD and NZD direction will be dictated by offshore announcements, with the ECB monetary policy statement the pick of the scheduled releases.

Global equity markets slipped lower Friday - Dow -0.95%, S&P 500 -0.39%, FTSE -0.44%, DAX -0.17%, CAC -0.65%, Nikkei +0.18%, Shanghai -1.32%.

Gold prices dipped 0.54% on Friday closing out the week at $1,489 an ounce. WTI Crude Oil prices were marginally higher on Friday, up 0.2% closing out the week at $53.87 a barrel.

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