NY Open: Cable all over the map on Brexit breakdown
Summary: The US economy remains on track with a mixed-to-positive Retail Sales print, but the same can't be said for the British currency, which is reeling on a flurry of Brexit headlines.
The DJIA, S&P 500 and Nasdaq indices are trading with small losses.
The US dollar has ceded ground since opening in New York, albeit marginally. The major focus is Brexit with traders keeping an eye on US/China trade developments, oil, and Wall Street. Tory MP Jacob Rees-Mogg called for a vote of no-confidence, which put fact to the earlier rumours.
GBPUSD, at 1.2800, is above the 1.2753 low reached when Brexit Minister Dominic Raab resigned. Technically, the move below 1.2888, representing the 61.8% Fibonacci retracement level of the 2017-2018 range, opens the door to further losses to 1.2540. However, GBPUSD trading is a headline-driven crap-shoot, requiring very deep pockets, nimble fingers, and an inside track to political news.
FX risk sentiment is still slightly positive with traders digesting news of China’s overture suggesting a renewed effort to resolve the trade dispute. Traders are also emboldened by yesterday’s comments from Federal Reserve chair Jerome Powell. His warning that the economy could face headwinds suggested a tempering of the pace of US rate increases.
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