Once again, it was all about Brexit and the delayed vote ‘showdown’, which leaves the market with some bitter/sweet taste, as UK PM new Brexit bill was approved in the ‘principles’, but the idea of a soft Brexit by Oct 31st is at this point a hallucination at best as the vote over timetable to enact the necessary legislation was rejected. It means that the promise to leave the EU by Oct 31st is not realistic, and as a result, the Sterling was sold from its hefty levels, even if there is a glimpse of hope that a short-term 10 day extension may be granted as opposed to an extended new deadline for Jan 2020, in which case, amendments of the withdrawal bill may follow. If the Brexit extension moves into early next year, then the UK appears to be headed towards a fresh general election. Brexit is the never ending story indeed with lots of unknowns still up in the air. Amid the Brexit-related volatility in the Pound, risk assets traded on the backfoot, leading to renewed demand towards the recently smashed JPY, USD currencies. The same could not be said about the Swissy, negatively affected by the latest episode in the Brexit saga and hence piggybacking the behavior in the Euro, which still exhibits tepid weakness too. The high-beta/commodity currencies complex (AUD, NZD, CAD), with the exception of a strong CAD, could not find follow through demand as the risk dynamics took a hit.
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