Stirling Hits Five-Week High

GBP

Sterling surged to a five-week high on Thursday after lawmakers voted to prevent Prime Minister Boris Johnson taking the UK out of the EU without a deal on October 31st. After Johnson was defeated for the first time, he put forward a vote to hold an election on October 15th but this was also rejected by MPs. The pound however responded to a sense that a ‘no-deal’ had been averted for now and continued to rise. Removing the immediate threat of a ‘no-deal’ Brexit has helped sterling to recover from record lows. The pound rose as much as 0.8% to above 1.2350 against the US dollar; its highest since July 29 which built on Wednesday surge of 1.4% which is the biggest one day jump since March.

Furthermore MPs will get another chance to vote for an early election on Monday, the government has announced. The initial vote for an election was voted down by MPs with Shadow Chancellor John McDonnell saying Labour wanted an early election, but its priority was stopping a no deal Brexit. Friday will see the Bill aimed to prevent a no-deal Brexit which was approved by the House of Commons on Wednesday, will now pass through the House of Lords and be complete.

Lastly pressure is continuing to mount on Johnson with 21 rebel MPs expelled from the conservative party this week. His brother Jo Johnson who voted remain in the 2016 referendum also resigned on Thursday saying he was ‘torn between family loyalty and national interest’.

Key Announcements

13:30 – USD: Average Hourly Earnings m/m – Unchanged at 0.3%
13:30 – USD: Non-Farm Employment Change – Forecast at 160k from previous 164k
13:30 – USD: Unemployment rate – Unchanged at 3.7%