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Pound Advances As Parliament To Vote On Brexit Delay

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Pound Advances As Parliament To Vote On Brexit Delay

The pound spiked up against its major counterparts in the early European session on Wednesday, as a bill seeking Brexit delay is set to vote in the Commons after Prime Minister Boris Johnson lost control of Parliament.

Tory rebels and opposition MPs voted last night in favor of debating the bill, which is seen passing today.

The legislation forces the PM to ask for a Brexit extension from Brussels until January 31, except MPs approve a new deal, or vote on a no-deal Brexit, by October 19.

No 10 said he will seek a snap general election, to be held on October 15.

The Labour leader Jeremy Corbyn confirmed that his party would not vote for an election unless no-deal Brexit is ruled.

Data from IHS Markit showed that the UK service sector growth remained subdued in August reflecting slower growth in output and new orders.

The IHS Markit/Chartered Institute of Procurement & Supply Purchasing Managers’ Index fell more-than-expected to 50.6 in August from 51.4 in July. The reading was forecast to drop to 51.0.

The currency has been trading higher against its major counterparts in the Asian session.

The pound strengthened to a 5-day high of 1.2197 versus the dollar, after falling to 1.2082 at 5:00 pm ET. The pair had closed yesterday’s deals at 1.2082. The pound is likely to find resistance around the 1.27 level.

The pound hit a 5-day high of 129.51 against the yen, following a decline to 127.94 at 5:00 pm ET. At yesterday’s trading close, the pair was quoted at 127.94. On the upside, 136.5 is likely seen as the next resistance level for the pound.

The latest survey from Jibun Bank showed that Japan services sector activity accelerated in August, with a PMI score of 53.3.

That’s up from 51.8 in July and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

Reversing from a low of 1.1918 seen at 5:00 pm ET, the pound firmed to a 2-day high of 1.2016 versus the franc. At Tuesday’s close, the pair was worth 1.1923. The pound is seen facing resistance around the 1.25 level.

Following a decline to 0.9081 at 5:45 pm ET, the pound climbed to a 2-day high of 0.9032 against the euro. The pair had ended yesterday’s trading session at 0.9078.The next possible resistance for the pound is seen around the 0.88 level.

Data from IHS Markit showed that the euro area private sector logged a moderate growth in August, though the pace of expansion improved slightly more than initially estimated.

The final composite output index rose to 51.9 in August from 51.5 in July. The flash score was 51.8. Any reading above 50 indicates expansion in the sector.

Looking ahead, U.S. and Canadian trade data for July and Fed Beige book report are slated for release in the New York session.

The Bank of Canada will announce its interest rate decision at 10:00 am ET. The BoC is widely expected to keep its policy rate steady at 1.75 percent.

The material has been provided by InstaForex Company – www.instaforex.com