Forex trends Thursday: Sterling retraces some lost ground after PM May survives confidence vote

Singapore subway MRT escalator at One North; taken August 2018.Singapore MRT escalator at One North.

Pound sterling recovered some lost ground on Wednesday as concerns over the prospect the U.K. might change leadership amid an unfinished Brexit process were eased after Prime Minister Theresa May managed to survive a confidence vote.

The British pound/dollar was at 1.2630 at 8:18 A.M. SGT rising from as low as 1.2476 in Wednesday’s session, but off that session’s high of 1.2672, according to DZHI data.

U.K. Prime Minister Theresa May survived a confidence vote 200-117 by her political party, but the large number of her party’s members of parliament rebelling showed Brexit deadlock wasn’t likely to abate soon, Reuters reported. The confidence vote was called after May on Monday cancelled a vote in parliament on the Brexit deal she negotiated with the European Union amid indications it would badly fail to pass.

Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Thursday that the tally stacked up to a clear majority against May’s Brexit deal.

“If her deal fails in Parliament eventually, a no-confidence motion in Parliament remains probable outcome,” Innes said.

“Indeed, another treacherous Brexit climb lies ahead which will leave the pound extremely vulnerable to headline risk, even more so since the pound rallied with investors expecting May to win and strengthen her mandate,” he said, adding he was “not sure if that is the actual outcome given her slimmer margin of confidence than expected.”

May was expected to head to Brussels on Thursday, hat in hand, to ask EU leaders for “clarification” on parts of the deal, Reuters reported.

Currencies

The U.S. dollar index, which measures the greenback against a basket of currencies, was at 97.00 at 7:05 A.M. SGT, off levels as high as 97.48 earlier in the week, according to ICE futures data.

The 10-year U.S. Treasury note yield was at 2.91 percent at 8:16 A.M. SGT, climbing from as low as 2.882 percent in Wednesday’s session, according to Tullett Prebon data.

The euro/dollar was at 1.1373 at 8:18 A.M. SGT after trading in a 1.1314 to 1.387 range on Wednesday, according to DZHI data.

The dollar/yen was at 113.311 at 8:19 A.M. SGT after trading in a 113.11 to 113.521 range on Wednesday, according to DZHI data.

The dollar/yuan ended Wednesday at 6.8778 after trading in a 6.8746 to 6.8928 range during the session, according to DZHI data.

The dollar/Singapore dollar was at 1.3722 at 8:19 A.M. SGT after trading in a 1.3706 to 1.3740 range on Wednesday, according to DZHI data.

The dollar/Malaysian ringgit ended Wednesday at 4.1830 after trading in a 4.1790 to 4.1855 range during the session, according to DZHI data.

The dollar/Indonesian rupiah ended Wednesday at 14,595 after trading in a 14,550 to 14,603 range during the session, according to DZHI data.

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