British pound drops again in three-year low against dollar
The British pound has dropped again in historic low against the US dollar with all the turmoil surrounding Brexit.To add to all the melee’, Boris Johnson’s announcement to call an early election if he is outvoted tonight put further pressure on the currency.
The pound dropped as much as 0.8 per cent to $1.197. The last time it hit such a low level was four months after the 2016 Brexit referendum, when it sank by no less than 9 per cent against the dollar before quickly rebounding.
Pound reaches 30 year low
The pound has not regularly traded below $1.20 since the mid-1980s. Conservative rebel and former chancellor Philip Hammond is predicting that MPs opposed to a no deal have the numbers to seize control of the House of Commons timetable on Tuesday.
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Johnson threat of early election spooks forex markets
The prime minister’s ultimatum has set up a day of drama at Westminster as MPs return to the House of Commons from their summer recess and vote on whether to seize control of the Brexit process from the prime minister.
About 15-20 Conservative MPs could work with Labour and other opposition parties to seize control of the Commons agenda. They will then attempt to pass an emergency law to stop Mr Johnson taking Britain out of the EU without a deal.
Brexit turmoil to continue
All this turmoil can only bring uncertainty to the markets especially with some pretty depressing figures regarding UK manufacturing output. Forex markets will remain choppy in the near future as the political situation continues to deteriorate.
US stocks down due to China trade wars
Stocks especially in the US took a battering early on Tuesday as Dow futures were down by almost 250 points with further falls expected. Other blue-chip indices such as the NASDAQ and S&P were also sharply lower. These drops have been linked to the new tariffs on Chinese goods imposed by the US which have just been introduced. The USD also continued sinking against the EUR, and was at a historic low of $1.0926 just before markets opened in the US on Tuesday.
Osprey FX users would do well to monitor what goes in the UK parliament today to observe any further movement in the GBP/USD and GBP/EUR trading pairs.