 Sterling's selloff accelerates today and Brexit optimistic faded. The Pound was lifted by EU chief Brexit negotiator Michel Barnier's offer of an unprecedented relationship last week. It's now single-handedly hammered by Barnier too as he blasted UK's Brexit plan. Adding further pressure to the Sterling, UK PMI manufacturing dropped to 25-month low in August. More data risks are lining up ahead including construction and services PMI. Canadian Dollar follows as the second weakest because even though trade negotiation with US will resume this week, there is no sign of a conclusion. Resilience in oil price, with WTI continuing to press 70, is ignored by the Loonie. On the other hand, Australian Dollar trades broadly higher, ahead of tomorrow's RBA rate decision. There is absolutely no chance for RBA to adjust interest rate. And the central bank is expected to reiterate its stance that interest rate will stay low for a while as pick-up in inflation and wage growth will be gradual. Euro follows as the second strongest one for today. Turkish central bank CBRT said it will adjust its monetary stance in September meeting given the "significant risks" to price stability. Some volatility is seen in USD/TRY but there is hardly any direction as sideway trading continues. A risk on Lira, and Euro, is that CBRT is now setting itself up to disappoint the markets. In other markets, European stocks are mixed at the time of writing. FTSE continues it's inverse relationship with the Pound and is up 0.92%. CAC opened lower and turned positive to up 0.04%. DAX, on the other hand, stays in red, down -0.37%. Earlier today, all major Asian indices declined. Nikkei closed down -0.69%, Hong Kong HSI down -0.63%, China Shanghai SSE down -0.17%. Singapore Strait Times down -0.20%. WTI crude oil is back above 70 but it's uncertain which this level can be kept. Gold continues to hover around 1200. |
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