Market Brief: Pound Extends Recovery

A summary of news and snapshot of moves ahead of the US session.

  • The pound continued to find support from short-covering and bargain hunting as risks of a no-deal Brexit receded after MPs passed a bill designed to stop a no-deal Brexit last night, which is expected to pass through the Lords into law. The cable has broken above the high of the previous week circa $1.2310, providing more reasons for the bears to rush for the exits.
  • The EUR/USD showed bullish follow-through on Wednesday and in this first half of Thursday’s session after it had created a reversal stick on the daily the day before in the form of a bullish hammer. It has been supported mainly by odds of a no-deal Brexit receding and US-China trade optimism, as well as weakness in the US dollar, following a poor manufacturing PMI report there. Indeed, Eurozone data hasn’t been too great with German factory orders diving 2.7% in July in the latest sign that the Eurozone’s economic powerhouse may be heading for a recession.
  • The Canadian dollar rose further after the BoC was less dovish than expected yesterday.

  • Stock index futures jumped overnight. Sentiment was given an extra boost on news that US and China will resume trade talks in October. Sentiment had already been lifted by stronger China Service PMI the day before, along with news Hong Kong’s PM was to officially withdraw the extradition treaty.
  • Once the European session got underway, however, the indices came off their best levels and the UK’s FTSE turned red on the day and took out the previous day’s low, hurt by a rallying pound. The German DAX showed resilience to euro strength and despite poor German factory data.


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.