July 1, 2022

Brexit Chaos: Is Brexit in danger? > Forex Highlights

Brexit Chaos: Is Brexit in danger?

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Following the unexpected resignation of David Davis, Britain’s top Brexit negotiator, from May’s cabinet, it was the foreign minister’s turn to quit. The UK Prime Minister should now deal with Brexit chaos and unite her team.

Foreign Secretary Boris Johnson, like Davis, objected to UK Prime Minister’s vision for the country’s “softer” EU exit. Boris Johnson tweeted:

Both senior ministers resigned two days after the government agreed a new softer Brexit plan. The two resignations were a backslide in May’s cabinet unity, undermining her position and casting doubt over the Brexit process.

Trade War Update

Tesla is the first automaker to raise prices by 20% in China, following China’s retaliatory tariffs on US car imports. Further, China announced the raising of “anti-dumping tariff rates” regarding US optical fiber products, effective on July 11. USA-China trade war got real on Friday as the two economic giants announced the imposition of tariffs against each other.

In the context of the global trade war escalation Switzerland is the eighth WTO member to launch a complaint against U.S. tariffs on steel and aluminum.

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CURRENCY MARKETS

Currency markets were broadly risk-positive as investors appeared to ignore the U.S.-China trade dispute.

The dollar rose 0.3% against his six major traded rivals, after falling on Monday at its lowest since June 14, as trade war fears vanish.

The dollar rose 0.3% against the Japanese Yen, boosted by broad appetite for risk in currency markets on Tuesday.

The Sterling strengthened against the euro and at 0900 GMT was up 0.2%, after hitting a four-month low, following the UK senior ministers’ resignations.

The Euro fell 0.3%, due to greenback’s rally, heading for its biggest daily decline versus the dollar in over a week.

Oil prices rose above $79 pb due to growing supply cuts and worries around the world.

Sources: Reuters, CNN money, the guardian

PLEASE NOTE The information above is not investment advice.