FX round-up: Pound climbs as MPs push to take 'no deal' Brexit off the table
By Alexander Bueso
Date: Tuesday 22 Jan 2019
(Sharecast News) - Sterling is finding a bid in late afternoon trading after a cross-party motion was tabled in parliament in order to head-off the risk of a so-called 'hard Brexit'.
The proposal, which was tabled by Tory MP, Yvette Cooper, and Labour's Nick Boles, would in effect force the Prime Minister to extend Article 50 if she was unable to win sufficient backing for her proposal on withdrawal by the end of February, with several ministers having reportedly threatened to resign if she did not give her backing to the bill.
The measure was to be voted on next 29 January.
Commenting on the news, analysts at Rabobank said that:" from the perspective of GBP investors, this would remove the most bearish scenario from the table - at least for now. However, it doesn't solve the issue of finding a compromise Brexit deal that would provide businesses with the certainty that they need."
As of 1637 GMT, cable was up by 0.44% at 1.29510 and versus the euro, the pound was gaining 0.52% to 1.1403.
Meanwhile, in the background, the spot US dollar index was drifting lower by 0.03% to 96.3040 and at its session lows, having earlier risen as high as 96.4840.
Knocking the US dollar off its perch, the National Association of Realtors reported that existing home sales in the States fell by 6.4% month-on-month in December, to reach an annualised pace of 4.99m (consensus: 5.24m).
Mickey Levy at Berenberg Capital Markets said the decline in home sales last month was likely made worse by FEMA's decision to stop issuing policies under the National Flood Insurance Program at the start of the partial US government shutdown, a step which had since been revoked.
But in any case, Levy believed the trend was now pointing lower, pointing out that new home sales for 2018 had averaged 5.3m, versus 5.51m in the year before - the first fall since 2014 - and with 2019 set to see another drop.
Top take note of, dollar/yen was edging lower by 0.37% to 109.285 amid simmering concerns around the US-China trade talks.
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