Pound Holds Steady as Brexit Saga Pushes On

GBP

The British pound is holding steady against rivals ahead of key events today. Market participants are looking forward to the Brexit deadline extension to be granted by the European Union. The EU can agree on a technical extension or a longer extension. The technical extension could grant the UK four weeks till November 30, or a three-month extension till the end of January 2020 with the possibility of an earlier exit if the deal has been ratified. On the other hand, the UK parliament will vote on a motion submitted by Johnson calling for a general election, where Johnson needs a two-thirds majority to win. The sterling will remain subject to headlines on Brexit saga. The GBPUSD is currently trading below $1.2850, and the GBPJPY is hovering around 139.50.

USD

The dollar index, which measures the greenback against a basket of major currencies, drifted slightly lower to 97.76 as investors await the Federal Reserve meeting outcome. The Fed will kick-off a two-day monetary policy meeting tomorrow. The CME Fed Watch Tool is showing a probability of 94.1% that the meeting will result in an interest rate cut of 25 basis points. Despite the heightened chances of a rate cut, the US 10-year yields climbed to a six-week high of 1.844% on enhanced risk sentiment. The USDJPY continued to trade in a tight range near the 200-day exponential moving average at 108.70.

Metals

Gold prices pared earlier gains as trade developments supported the flow to riskier assets. Investors will eye the Fed's next interest rates move to position themselves. The shift in monetary policy stance from tightening to easing was a key booster for gold prices this year. Currently, the price of a gold ounce is trading at $1506, the silver ounce is trading slightly above $18, while palladium is $3 short from logging a fresh record high.

Oil

Oil prices edged lower during the Asian session as investors shift their focus towards the Fed's monetary policy meeting this week. An interest rate cut could boost investors' economic expectations and enhance their risk appetite. The West Texas Intermediate crude futures dropped to $56.22, and Brent futures declined to $61.60.

Major Economic Events

Disclaimer 

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM.COM. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.