Sterling has remained remarkably stable, with the GBP/USD cross anchored around the 1.32 mark for the third consecutive session, ahead of today’s indicative parliamentary votes on a Brexit plan B. The House of Commons is expected to vote on about six different scenarios to ascertain whether any would garner a parliamentary majority. These votes are not legally binding on the government but should one or more scenarios enjoy the backing of a majority of the 634 MPs it would be difficult for Prime Minister to ignore the result and simply pursue her goal of getting parliament to vote a third time on her draft Brexit deal.
The Kiwi Dollar sold off sharply this morning after the Reserve Bank of New Zealand indicated at its monetary policy meeting that its next move was more likely to be a rate cut than a hike. The RBNZ is effectively the first G10 central bank to explicitly state that it may cut interest rates in the face of slowing economic activity and the NZD/USD cross promptly dropped one big figure to a two-week low of 0.68. Nevertheless the cross has for now remained in its narrow year-to-date range.
