Currency: Pound Flat as May Wins Confidence Vote
CURRENCY – On Thursday, the British pound remained flat in Asia. Further, this followed after Prime Minister Theresa May survived a vote of no-confidence. The news came after the defeat of May’s Brexit deal in the UK parliament on Wednesday.
As of 11:51 PM ET (04:51 GMT), the GBP/USD pair declined 0.08% to 1.2867.
Until next week, May can prepare an outline for its plan “B.” The market expressed confidence about a possible extension of the Article 50 exit date, surpassing the original deadline on March 29.
“We must find solutions that are negotiable and command sufficient support in this House,” May said.
“It’s unlikely there will be big changes to May’s plan, so parliament is likely to oppose it as well,” stated Daiwa Securities Senior Currency Strategist Yukio Ishizuki.
Meanwhile, there was an increase of 0.2% to 6.7660 in the USD/CNY pair. This is amid the move of the People’s Bank of China (PBOC) setting the yuan reference rate at 6.7592. This is in comparison with the PBOC’s previous fix of 6.7615.
The central bank placed CNY 560 billion into the banking system of China.
Meanwhile, the US Dollar Index, which measures the greenback’s strength against a basket of other currencies, surged 0.2% at 95.838.
Elsewhere, there was a decline of 0.2% at 0.7150 in the AUD/USD pair, trading close to a one-week low.
The USD/JPY little changed at 109.00.
On Thursday, Bank of Japan (BOJ) Governor Haruhiko Kuroda flagged warnings about the impact of the aging societies. There’s a possibility that this reality could lead to declining fund demand which would make the interest rates to go lower. Eventually, this would inflict more difficulty in the job of PBOC.
Currency: Pound recovers as dollar little changed
On Wednesday, the British pound was at a steady pace after it dropped late Tuesday. Further, this was amid the rejection of the parliament on Prime Minister Theresa May’s Brexit deal.
Meanwhile, the greenback little changed. There was an increase of 0.17% to 1.2865 in the GBP/USD as of 11:07 AM ET (16:07 PM GMT). Further, this followed after the pair dove to 1.2667 late Tuesday.
Against the Brexit deal of May, the House of Commons voted 432-202. However, the decision inflicted uncertainty over the future of Britain’s plans to leave the EU on March 29.
As per Bank of England Governor Mark Carney, the recovery of the currency revealed that markets currently see a “diminished” risk of a disorderly Brexit with no transitional arrangements.
Elsewhere, the euro declined as the EUR/USD pair declined 0.10% to 1.1401.