- Opposition parties eye legal action
- Corbyn confirms ‘vote of no confidence’ at some point
Sterling volatility hit it’s highest level since December yesterday as traders continued to speculate over the future relationship between the UK and EU after the Brexit deadline of 31st October. On Wednesday Boris Johnson announced plans to suspend Parliament for more than a month in order to limit time for any major intervention from ministers which has been widely criticised by opposition parties. We are still very much in the dark in respect to what the opposition plans to do, although reports yesterday suggested some sort of legal action against the delay. As you’d expect, Sterling has been the main victim of the uncertainty this week, trading in a range of over 1.5% versus the US Dollar, with the pair continuing to trade at a near 34 year low. A number of leading banks have suggested GBP/USD could fall a further 10% in the event of a ‘no deal’ Brexit, with Blackrock even going as far as predicting parity!
US/China trade talks took a turn for the better yesterday as reports suggested the US may be willing to suspend imminent tariffs on Chinese goods which were originally due to begin on 1st September. The Chinese commerce minister confirmed progress hinges on ‘favourable conditions’, although markets were very much undecided as to what that actually meant. Regardless, the US Dollar strengthened on the prospect of a resolution, although there is still an awfully long way to go.