Foreign exchange markets were generally quiet with Brexit uncertainty hanging over the market. Brexit is now balanced on a knife edge.
Investors sought safer assets after British lawmakers forced a delay in the UK government’s Brexit plans. The British parliament voted to approve the withdrawal deal but rejected the tight timetable. Johnson now looks set to push for a general election before Christmas to break the impasse. It is up to the EU to decide whether to extend Britain’s Oct. 31 deadline for its departure.
British Prime Minister Boris Johnson had previously warned parliament that if it defeated him on the timetable and forced a delay until January, he would abandon his attempt to ratify the deal. That led investors to price in elections and Brexit delay.
Sterling slipped on Wednesday further off recent highs around $1.30. Sterling was unchanged against the dollar by 0900 GMT after falling 0.62% on Tuesday. Against the euro, sterling fell 0.1%, last trading at 86.44 pence.
Two-week implied volatility on sterling – a contract that captures the Oct. 31 Brexit deadline, continued to fall.
START TRADINGForex – Brexit uncertainty hangs over the market
Investors sought safer assets after British lawmakers forced a delay in the UK government’s Brexit plans. Central bank meetings are due on Thursday in Sweden, Norway and the euro zone.
Against a basket of six major currencies, the dollar was neutral at 97.547.
The Japanese yen rose to a one-week high as investors sought safer assets amid Brexit uncertainty. The Japanese yen rose to 108.25 per dollar, its strongest since Oct. 15, before settling at 108.380, up 0.1% on the day.
The Swiss franc, which investors also tend to buy when they feel nervous, rose 0.1% to 1.1006 francs per euro.
Australia’s dollar dropped 0.2% to $0.6841 as risk aversion knocked a currency considered a barometer for investors’ moods.
The euro edged lower to $1.1120 before Thursday’s European Central Bank meeting, outgoing president Mario Draghi’s final policy meeting.
The pound moved down on Tuesday as investors awaited votes in the British parliament. Sterling slipped 0.1% to $1.2947 in early London trading. It was flat against the euro and was last trading against the single currency at 0.86050.
Oil prices slipped toward $59 a barrel on Wednesday on data showing a bigger-than-expected rise in U.S. crude stocks. Τhe prospect of deeper output cuts by OPEC and its allies offered support. Brent crude futures were down 47 cents, or 0.79%, to $59.23 a barrel at 1130 GMT. WTI crude futures for December delivery fell 56 cents, or 1.03%, to $53.92 per barrel.
Gold prices were largely unchanged on Wednesday. Investors awaited more clarity on the Brexit and the U.S.-China trade war, while some technical buying provided modest support to the bullion. Spot gold was up 0.1% at $1,489.31 per ounce as of 0622 GMT.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money