Commons drama sees sterling rally

Fiona Cincotta
By :  ,  Senior Market Analyst
With rebel MPs now seemingly in control of the Commons agenda, it looks likely that the UK will be heading for a snap election in October. What looks less certain is whether there is going to be a hard Brexit, as prime minister Boris Johnson has been threatening.

Traders in GBP are braced for even more volatility following some extreme swings in the GBP/USD pair during last night's high drama in the House of Commons.

Sterling was trading at 1.21252 against the dollar this morning, 1.103 against the Euro.

FTSE sees early relief rally

The FTSE opened sharply up on Wednesday, largely a relief rally after it had been steadily sold down since the start of the week. Royal Bank of Scotland said that a rush to make PPI claims in August ahead of the FCA deadline at the end of last month has led to an additional impairment in its Q3 numbers, reckoned to be between £600 million mans £900 million. Retailer Dunelm bucked the trend in high street stocks with some good full year numbers, showing sales up 10% and profits up almost 25%. Dunelm was up 2.84% in early trading.

 Asian stocks up as Chinese data looks more robust

Asian stocks were up overnight on the back of more positive economic data, especially in the services sector. The Shanghai Compositive Index was up 0.3% as a survey of Chinese businesses indicated the fastest growth in three months. South Korea and Japan also saw gains.

US data has been less positive. A contraction in the US manufacturing sector, the first since Trump was elected, combined with ongoing worries on the China trade talks, has forced 10 year bond yields down to 1.429% yesterday.

Related tags: GBP Forex Sterling Brexit

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