Forex trends Tuesday: Parliament’s Brexit vote closely eyed for sterling direction

Euro coinsPhoto by Leslie Shaffer

The pound sterling may have steadied from its recent losses, but Kathy Lien, managing director of foreign-exchange strategy at BK Asset Management, is calling it “a sell and not a buy on rallies,” as the outcome of the U.K. Parliament’s Brexit vote is all-important for the currency.

“At this point, [Prime Minister Theresa] May is expected to lose by a margin big enough to force her to seek an Article 50 extension,” Lien said.

“An immediate or delayed recovery in GBP would depend on how quickly Plan B emerges and how aggressively the opposition pushes for a general election or second referendum,” she said, noting that a second referendum was the preferred option for U.K. businesses.

Currencies

The U.S. dollar index was at 95.59 at 7:05 A.M. SGT after trading in a tight range on Monday, according to ICE data.

The 10-year U.S. Treasury note yield was at 2.708 percent at 8:18 A.M. SGT after falling as low as 2.664 percent on Monday before climbing again, according to Tullett Prebon data.

The euro/dollar was at 1.1472 at 8:25 A.M. SGT after trading in a 1.1439 to 1.1482 range on Monday, according to DZHI data.

The British pound/dollar was at 1.2878 at 8:25 A.M. SGT after trading in a 1.2817 to 1.2931 range on Monday, according to DZHI data.

The dollar/yen was at 108.307 at 8:25 A.M. SGT after trading in a 107.97 to 108.56 range on Monday, according to DZHI data.

The dollar/yuan ended Monday at 6.7667 after trading in a 6.7336 to 6.7701 range during the session, according to DZHI data.

The dollar/Singapore dollar was at 1.3532 at 8:26 A.M. SGT after trading in a 1.3510 to 1.3555 range on Monday, according to DZHI data.

The dollar/Malaysian ringgit was at 4.0970 at Monday’s close after trading in a 4.0910 to 4.1020 range during the session, according to DZHI data.

The dollar/Indonesian rupiah ended Monday at 14,120 after trading in a 14,030 to 14,140 range during the session, according to DZHI data.

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