Sterling loses its shine

Sterling loses its shine

Forex 4 minutes to read
MO
Michael O’Neill

FX Trader, Loonieviews.net

Summary:  GBPUSD is in free-fall and Prime Minister Theresa May and British politicians of all stripes are to blame.


May said she would reintroduce her withdrawal agreement during the week of June 3, perhaps forgetting that her deal has been resoundingly rejected three times. A Labour party spokesman said the party wouldn’t support the current Brexit bill and GBPUSD’s morning slide accelerated.

Democratic Unionist Party leader Nigel Dodds piled on suggesting May’s deal was likely to fail. The GBPUSD downwards slide from May 5 accelerated on the break of support at 1.2900 and again at 1.2880. The break of the 50% Fibonacci retracement level of the December-February range at 1.2950 targets 1.2687 on a break of the 61.8% Fibonacci level of 1.2618.

The price action for the rest of the G10 major currencies was subdued following a series of “mixed” US economic reports. April Retail Sales data was a tad weaker than expected, but a soft report was in the cards because of the blowout March report. The NAHB housing report was better than expected, US inventories were flat and Industrial Production data disappointed.

Canada CPI rose 2.0% in April, a touch better than the 1.9% increase in March. The results were expected. USDCAD chopped about in a 1.3456-1.3491 range following the news and is still trapped in that range. Traders are taking their cue from broad US dollar sentiment, which is underpinning the currency pair.

Wall Street opened in negative territory led by 172 point drop in the Dow Jones Industrial Average. Those losses have been pared in early trading, and the Nasdaq is actually higher on the day. (as of 14:00 GMT). 
Chart: GBPUSD daily. Source: Saxo Bank

Quarterly Outlook

01 /

  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy


Business Hills Park – Building 4,
4th Floor, office 401, Dubai Hills Estate, P.O. Box 33641, Dubai, UAE

Contact Saxo

Select region

UAE
UAE

All trading and investing comes with risk, including but not limited to the potential to lose your entire invested amount.

Information on our international website (as selected from the globe drop-down) can be accessed worldwide and relates to Saxo Bank A/S as the parent company of the Saxo Bank Group. Any mention of the Saxo Bank Group refers to the overall organisation, including subsidiaries and branches under Saxo Bank A/S. Client agreements are made with the relevant Saxo entity based on your country of residence and are governed by the applicable laws of that entity's jurisdiction.

Apple and the Apple logo are trademarks of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.