Pound retreats against the peaking Dollar

October 13, 2016

The “Hard Brexit” speculations along with the recent upsurge of the Dollar, wrecked the support of the British currency, with GBP/USD renewing lows on Tuesday.ВВ The pair collapsed to a 1.21 levelВВ after the start of the New York tradingВВ following the speech of the Minneapolis FED head Neil Kashkari advocating the earlier rate hike. OnВВ Wednesday Pound paredВВ declines recovering to a 1.23ВВ levelВВ as the British Prime MinisterВВ Theresa May allowed the parliament to vote on her plan, which in turn eased investors’ concerns about the ruined ties with the EU.

TheВВ pound has dropped by 18 percentВВ since theВВ referendum especially accelerating in this month as the date of the formal split-up was announced and the Prime Minister takes a hostile stance towards the cooperation with European bloc.

According to the CFTC data, the bearish positions of the Pound rose to a new record-high level as the large investors and hedge funds expect theВВ Hard Brexit to become a terrible ordeal for the UK, costing the country increased taxes, decreased exports and rising prices on some import goods such as cars.

The Greenback trades are nearly unchanged on Wednesday, stalling near an eight-month peak at 97.80 level. The investors are almost sure thatВВ the FED Funds rate will increase in November, pricing its probability to 91.7%.

TheВВ US currency rose by 0.34% against Euro, remaining nearly flat against the Swiss Franc and Yen, while falling against the Australian Dollar by 0.48% as the commodity market feels fine today.

The preciousВВ metals advance with the biggest recovery seen with Palladium,ВВ Gold rose by 0.12%.ВВ On the energy market, the crude oil trades in a green zone propelling by the bullish expectations of the API crude estimate in the US.

European equities retreat,ВВ as DAX fell 0.06%, and FTSE holds at its peakВВ of 7050,20 points.ВВ The US and GermanВВ government bonds extend declines, falling a second-week in a row,ВВ signalling an increased risk appetite on theВВ markets. The yield on German bonds rose 113% to 0.055, whileВВ US bond yieldsВВ rose 1.28% to 1,782.

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