ICM: Pound Tumbles on “hard” Brexit worries, RBA on Hold

ICM, the leading London-based FX and CFDs provider, stated that the pound fell to an eleven-month hold versus the United States dollar as the worries over “hard” Brexit weigh on the currency. The Reserve Bank of Australia concluded its monetary policy meeting by leaving policy unchanged again. On the other hand, the US dollar rose to a three week high and the US stocks ended the session in green.

The British Pound traded at a low of $1.2920 on Monday as Brexit concerns continue to weigh on the currency. The Cable depreciated by almost ten percent from its 2018 peak of $1.4370 in a short period. The Bank of England hiked interest rates by 25bps to 0.75% last week. However, the currency tumbled as Governor Mark Carney addressed the risk of a hard Brexit on the economy. Carney said that the outcome of a tough Brexit could force the central bank to ease the monetary policy.

The Reserve Bank of Australia kept interest rates unchanged at a low of %1.50 for its 23rd consecutive meeting. The bank stated that low rates are supporting the economy, and any changes to the monetary policy will be data dependent. As per ICM trading platform, AUDUSD is trading in a tight range between $0.7300 and $0.7500 due to the lack of major fundamental developments.

ICM highlighted that the dollar index which measures the strength of the greenback against a basket of major currencies traded at a high of 95.52 and settled at 95.36, its highest daily close since July 2017. The dollar is gaining strength from protectionism, as tariffs could help in lowering the U.S. trade deficit. As per ICM trading platform, the Greenback rose to a record high against the Turkish lira where the pair USDTRY reached an all-time high of 5.4269.

Major US indices ended Monday’s session higher buoyed by the strong second-quarter earnings. Traders dumped the trade war fears and focused on the healthy corporate earnings. As per ICM trading platform, the Dow Jones Industrial Average rose for the third straight session where the index gained 0.2% and settled at 25502. SPX500 soared to the highest levels since late January and finished the session at 2850. The top performer was the tech-heavy Nasdaq Composite with gains of 0.6% to close at 7859.

The gold bullion has been trading in a tight range between $1204 and $1220. Gold prices could hold the tight range due to the lack of major developments which affect investors’ appetite for the precious metal. On the other hand, the silver ounce found support at $15.25 near a thirteen-month high and traded higher at $15.45.

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Oil prices rallied higher boosted by the renewed US sanctions on Iran. President Trump abandoned the nuclear deal earlier this year and imposed sanctions on Iran which came into effect today. Trump is trying to prohibit Iran from exporting oil which could tighten the oil market supply. The West Texas Intermediate crude futures rose to a one-week high of $69.88 per barrel and the Brent futures traded at a high of $74.44 per barrel. The American Petroleum Institute will report the US weekly crude oil stock later today. The US crude inventories were major price movers last week.

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