Pound Holds Gains as Disorderly-Brexit Prospects Recede

GBP

The British pound held gains against rivals as the chances of a disorderly Brexit slid. The UK parliament passed the Letwin Amendment on Saturday by a vote of 322 to 306, which forced Boris Johnson to send a letter to the EU asking for an extension for the Brexit deadline. The Letwin agreement was there to ensure four key elements: the UK doesn't leave the EU accidentally with no deal, prevent forcing the lawmakers to vote to prevent a disaster as time runs out, and give MPs more time to consider the deal, gain time to other alternatives. Market participants are now looking forward to the EU's response to the latest developments and the key votes to come this week. Dominic Raab stated yesterday that the conservatives have enough votes to pass the new deal. The GBPUSD is currently trading around $1.2930, and the GBPJPY is hovering above 140.

USD

The dollar index, which measures the greenback against a basket of major currencies remained under pressure trading at 97.30 as investors preferred European currencies following the latest Brexit developments. The Euro and pound account for almost 70% of the dollar index basket, meaning any surge in European currencies would weigh on the dollar. Market participants are anticipating the effect of recent developments (trade truce- Brexit) on the future path of interest rates. The US 10-year yields settled below 1.80%, the USDJPY is trading at 108.55, and the EURUSD rallied to a two-month high of $1.1171.

Metals

Gold prices continued to trade in a tight range as market participants await fresh fundamental drivers to position. The US-Sino trade truce and new Brexit deal enhanced investors' risk appetite and sent riskier assets higher on the back of safety assets. The price of a gold ounce is fluctuating around $1490, the price of silver ounce inched higher to 17.76, and palladium hovered near record high at $1770.

Oil

Oil prices remained caught in a four-dollar range as investors anticipated fresh movers. The International Monetary Fund warned that the Chinese economic growth could slow further in 2020, which would raise investors' concerns over the demand outlook. The West Texas Intermediate crude futures and Brent futures are currently trading slightly below $54 and $59.50, respectively.

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