By Andria Pichidi
The Pound has racked up a second day of losses, presently showing a 0.6% decline and is now down by 2.4% from week-ago levels versus the Dollar.
Markets look to be hedging more on there being on a no-deal Brexit than a Brexit with a deal and transition period, or even a Brexit cancelled scenario, even though these remain possibilities. The logic is that even if opposition members of parliament managed to legislate against a no-deal Brexit this week, which is looking a real possibility, then Prime Minister Johnson would call an election, of which he and his Tory party would be favourites to win, especially as he would have the backup of forming a coalition with the Brexit Party. This would keep the possibility, if not probability, of a no-deal on the table.
There would be no guarantee of Johnson winning an election, however, particularly if the Labour and Liberal Democratic parties united in a coalition. Cable printed a low at 1.1958, which is the lowest seen since the flash-crash nadir seen in the wake of the vote to leave the EU in 2016.
The pound also traded lower versus the euro and yen, among other currencies, but has so far remained above recent major-trend lows in these cases.
Various analyst notes are in circulation arguing the merits of taking a long sterling position, or buying an "long way" out-of-the-money call option in anticipation of a sustained short squeeze (boiling down to a bet that a no-deal Brexit will at some point cease to be a possibility, which is a risk proposition).
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
The Pound has racked up a second day of losses, presently showing a 0.6% decline and is now down by 2.4% from week-ago levels versus the Dollar.
Markets look to be hedging more on there being on a no-deal Brexit than a Brexit with a deal and transition period, or even a Brexit cancelled scenario, even though these remain possibilities. The logic is that even if opposition members of parliament managed to legislate against a no-deal Brexit this week, which is looking a real possibility, then Prime Minister Johnson would call an election, of which he and his Tory party would be favourites to win, especially as he would have the backup of forming a coalition with the Brexit Party. This would keep the possibility, if not probability, of a no-deal on the table.
There would be no guarantee of Johnson winning an election, however, particularly if the Labour and Liberal Democratic parties united in a coalition. Cable printed a low at 1.1958, which is the lowest seen since the flash-crash nadir seen in the wake of the vote to leave the EU in 2016.
The pound also traded lower versus the euro and yen, among other currencies, but has so far remained above recent major-trend lows in these cases.
Various analyst notes are in circulation arguing the merits of taking a long sterling position, or buying an "long way" out-of-the-money call option in anticipation of a sustained short squeeze (boiling down to a bet that a no-deal Brexit will at some point cease to be a possibility, which is a risk proposition).
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.