29 August 2019 : In currency markets, the Pound held to yesterday’s losses after Queen Elizabeth approved UK Prime Minister Boris Johnson’s plan to suspend Parliament. The request to suspend Parliament from September 9 to October 14 increased the odds of a hard or no-deal Brexit.  The opposition parties will fiercely battle the suspension by going to courts and most likely proceed with a no-confidence vote.

Investors are now fearing the risk of a severe recession if the UK leaves the EU with no deal. UK’s GDP has already shrunk by 0.2% in Q2 and recent developments may lead to an even further downturn. The Bank of England is likely to cut rates before year-end if the situation deteriorates further which would put more pressure on Sterling. Expect to see higher volatility in GBP trading for the next several days, but risks are more to the downside with the possibility of testing 1.20 in the short term. 

Source: FXTM Chief Market Strategist, Hussein Sayed

Reporting for EasyKobo on Thursday , 29 August 2019 in Lagos, Nigeria