Boris Johnson's Announced Suspension of Parliament Sent the Pound Spiralling

Xe Corporate APAC

August 28, 2019 2 min read

The AUDUSD opens at 0.6737 (mid-rate) and the NZDUSD opens at 0.6336 (mid-rate) this morning.

In the absence of any major economic data releases, the main talking point over the past 24 hours is the announcement that the Queen has agreed to Prime Minister Boris Johnson's request for a suspension of the UK parliament until 14 October.

The strategic decision means that MPs are unlikely to have time to pass laws to stop a no-deal Brexit on 31 October and increases the chances that the UK could leave the EU without a deal.

The British pound plummeted from 1.2280 to 1.2160 against the USD in immediate reaction to the announcement, but has since retraced half the move.

Crude oil prices are pushing higher after the Energy Information Administration said crude oil inventories tumbled by 10m barrels in the week ended 23 August compared to estimates for a decrease of 2.1m barrels.

The main driver for the Aussie Dollar during our trading session will be this morning’s Capex data release which is expected to show a 0.4% increase in capital expenditure in Q2 following on from a 1.7% fall in Q1.

The Kiwi Dollar remains under pressure ahead of this afternoon’s ANZ Business survey which is once again expected to show further deterioration in business confidence largely due to the ongoing US-China trade war

Investors will be looking to tonight’s  preliminary US quarterly GDP release for direction with the data expected to show GDP dipping from 2.1% in Q1 to 2.0% in Q2.

Global equity remain mixed - Dow +0.85%, S&P 500 +0.54%, FTSE +0.54%, DAX -0.25%, CAC -0.34%, Nikkei +0.11%, Shanghai -0.29%.

Gold prices are little changed trading at $1,541 an ounce. WTI Crude Oil prices have continued to push higher up 2.1% trading at $55.56 a barrel.

Upcoming Data Releases

  • NZ: ANZ Business Confidence - 11:00 AEST / 13:00 NZST

  • AU: Private Capital Expenditure q/q - 11:30 AEST / 13:30 NZST

Mid-Market Rates

AUDUSD0.6737-0.3%NZDUSD0.6336-0.5%AUDEUR0.6082-0.1%NZDEUR0.5717-0.3%AUDGBP0.55170.4%NZDGBP0.51890.3%AUDJPY71.520.1%NZDJPY67.25-0.1%AUDNZD1.06310.2%NZDAUD0.9405-0.2%GBPAUD1.8126-0.4%NZDCAD0.8433-0.3% GBPNZD1.9272-0.3%
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