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Pound Steady Despite Davis Resignation09 July 2018 by Dave Evans

Morning Report: 07.00 London

The British pound remains positive after the resignation of Brexit secretary David Davis. The move may have less impact following the Prime Ministers successful Chequers meeting where the party agreed their ‘unified’ approach to Brexit. The GBP/USD is higher this morning, as is the GBP/JPY, while the EUR/GBP is only slightly lower.

The biggest driver continues to be the weakness in the US dollar following a decidedly mixed jobs report on Friday. Headline payroll numbers rose more than expected, but the average earnings and unemployment claims rates disappointed. The dollar index dropped on Friday with follow on selling this morning.

The EUR/USD is extending its winning run off the lows, meanwhile, the AUD/USD is extending its strong bounce.

The USD/CAD has broken below 1.3100, while the USD/CHF is sitting below 0.9900.

Yen pairs are mixed, with strong gains for the AUD/JPY and EUR/JPY, but only minor advances on the GBP/JPY and USD/JPY.

Coming up today

Today we have MPC member Broadbent speaking at 08.50.

ECB President Draghi speaks at 14.00 and 16.00.

Trade Idea

The USD/CHF is in no man’s land between the parity level of 1.000 and 0.9800 as the two safe haven currencies balance each other off. More range bound trading could be on the cards.

July 9th, 2018: Pound Steady Despite Davis Resignation

A good way to play this is an In/Out trade predicting that the USD/CHF will stay between 0.9800 and a high of 1.000, not touching either 1.0000 or 0.9800 over the next 14 days for a potential return of 116%.

July 9th, 2018: Pound Steady Despite Davis Resignation