GBP/USD – Plunges as Boris plays prorogue card

Sterling suffering no-deal backlash

The pound is in freefall this morning after plans emerged to prorogue parliament and prevent MPs from passing legislation to prevent no deal.

GBPUSD Daily Chart

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This isn’t the first we’ve heard of these dirty tactics but it was maybe hoped that such un-democratic measures would not be needed or used. Some may have thought them inevitable but perhaps not at this point in the process.

Either way, it certainly caught markets off-guard and  came at a time when the pound had been recouping some of its losses. The FTSE, as ever, is the unintended beneficiary of the plunge in the currency, given that the vast majority of its earnings are generated outside of the UK.

Source – Thomson Reuters Eikon

Summer recess is now unofficially over and Brexit season is upon us. The next couple of months promises to be full of drama, boring parliamentary procedure and a few twists and turns along the way.

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam