Sterling Strengthens after Supreme…

GBP

The Pound strengthened yesterday after the UK Supreme Court ruled that the decision to suspend Parliament was unlawful, leaving Boris Johnson under intense pressure from rivals. The highest court in the land took the decision that the suspension was illegal and that Parliament should resume as soon as possible. In response, Speaker Bercow announced that the lower house would be back in session on Wednesday.

This verdict was a pound positive as it appears the chances of a no-deal have weakened further as Parliament can now produce legislation on the matter. Boris Johnson also stated that he would respect the decision, allaying fears that he would press ahead with further prorogues. However, the gains were capped as the result has increased uncertainty over a possible general election and the overall Brexit outcome. This increased uncertainty is seen in one-month implied volatility gauges, which have shot up to a three-week high.

USD

The Dollar slipped on Tuesday as US consumer confidence fell by the most in nine months because the economic outlook is gloomy in the face of the U.S.- China trade war. The index of consumer attitudes plummeted to 125.1, from a downwardly revised 134.2. This is seen as a worrying sign for the US economy as it is the first time that the consumer spending has been impacted by the trade war.

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