January 28, 2023

Pound steady after UK court ruling

LQDFX Forex news Blog Pound steady after UK court ruling

Share this article

Sterling firmed after the UK Supreme Court ruling that Prime Minister Boris Johnson’s decision to suspend parliament for five weeks was unlawful.

The top court’s decision was reducing the probability of a no-deal Brexit and increased the chances of a Brexit delay. The court said that because the decision to suspend, or prorogue, parliament was illegal “immediate steps” for parliament to resume should be taken “as soon as possible”. The court’s decision also reduces Johnson’s ability to suspend parliament again, providing parliament with more leeway to prevent a no-deal.

Johnson threatened to take Britain out of the EU on Oct. 31 with no transition deal if Brussels declines to make concessions on the divorce agreement. He said the aim of the suspension – from Sept. 10 until Oct. 14 – was to allow his Conservative government to bring in a new legislative agenda.

British Prime Minister Boris Johnson will not resign. He will fly back to London after his speech to the United Nations on Tuesday, a Downing Street source said. Johnson will hold a call with cabinet ministers later today, the source added.

The announcement of the decision sent the pound higher. The pound surged briefly to a day’s high of $1.2491 immediately after the decision. The British currency gained as much as nearly 0.5% on the day. It was last up 0.3% at $1.2469. Against the euro, it rose by 0.2% to 88.19 pence.

START TRADING

Forex – Pound steady after UK court ruling

Currency market moves were mostly small-scale, with one notable exception – the pound. U.S. investors were also waiting on closely-followed consumer confidence data.

The dollar rose slightly against the yen to 107.69 and inched higher against a basket of currencies to 98.664.

The Canadian dollar edged higher against its U.S. counterpart on Tuesday, 0.1% higher at 1.3253 to the greenback. Investors grew more optimistic on trade talks between the United States and China.

The safe-haven Japanese yen the yen traded at 107.62 yen per dollar, after reaching two-week highs of 107.32 the previous day.

The euro held below $1.10 on Tuesday as positive German business morale survey data calmed sentiment. Against the dollar, the single currency was broadly steady at $1.0989 and not far from a September low of $1.0926 hit on Sept. 3.

Oil prices fell as investors bet that Saudi Arabia could restore oil output faster than anticipated following attacks last week. U.S. crude oil futures were down 1.1% at $58.01 a barrel.

PLEASE NOTE The information above is not investment advice.

Sources: Reuters, Investing, CNN money