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Sterling sinks to new depths on Brexit anxiety, dropping to new 31 year lows around the 1.2800 level against the US dollar and even lower against the yen and the euro.
The combination of some Brexit effects already starting to become definite and this week’s slowdown in recent economic data may seem a bit like a domino effect in locally exposed sterling assets, as well as risky assets generally across the world.
Here’s CMC Markets Michael Hewson’s latest analyses on major currency pairs:
- EURUSD – the euro continues to struggle with the bias remaining towards a move towards the March lows at 1.0825. To stabilise we need to see a move back above the 1.1250 area.
- GBPUSD – this continues to be the big mover breaking below 1.3120 and opening up a move below the 1.3000 level. Having hit the 1.2800 level we could well head towards 1.2500, with a recovery back through the 1.3120 level needed to stabilise.
- EURGBP – having broken through the 0.8410 area we look set for a retest of the 0.8706 area, 61.8% retracement of the big down move from 0.9805/0.6535. A move back below the 0.8400 area would delay this outcome.
- USDJPY – while below the 103.50 area the risk remains for a return to the 100 level as well as the previous lows at 98.95. A move below 100.00 is likely to prompt the risk of further losses and possible BoJ intervention concerns.
Meanwhile the Reserve Bank of Australia on Tuesday left interest rates unchanged as the Australian dollar also dropped with 0.6%.