This week’s big news should be no surprise based upon the last several weeks; the U.K.’s Brexit vote. The U.K.'s lower level of Parliament overwhelmingly shot down the Brexit deal between the U.K. and the EU for the orderly departure of the U.K. from the EU. The loss is the largest loss by the Government in the history of the U.K., which is a pretty long history, making it a very loud statement. The citizens of the U.K. voted to leave the EU which is supposed to happen at the end of March, however if they simply just leave the EU with no way of transacting business in the future with the current EU members the U.K. economy could be severally hurt so a deal was worked out between the two so orderly business between them could continue. The Brexit deal was negotiated by the Prime Minister of the U.K. but based upon the overwhelming loss when it was voted on it is clearly not a deal that Parliament was interested in. Some leaders of the EU stated that they would consider negotiating further but after the resounding defeat, there may not be any point.
There was a lot of talk early in the week about what the vote would mean to the GBP should the deal be approved, rejected or rejected in a huge way. Of course, it was the latter but GBP has held up nicely. The vote was on Tuesday, the GBP lost a little over two big numbers to the USD but it gradually made it back, ending the Tuesday trading day at about even. It performed in very nearly an identical fashion against the JPY, AUD and CAD, it immediately lost against the EUR but it has punished it since that time gaining for the week, in fact, it has gained against all of its major trading partners.
With regard to the U.S. if it isn’t the trade war with China or the Russian collusion questions it’ll be something else which right now is the longest Government shutdown in our history. The USD has gained nicely against the EUR and CHF this week, it had some momentum against the JPY, NZD and a little against the AUD but was relatively flat against the CAD.
There are questions surrounding the oil market, some say it is about to crash, which was a likely contributor to the lackluster performance of the CAD, though it did gain against the EUR, it gained fast and big against the GPB but quickly gave it all back and lost just as big as its short term gain was but it was relatively flat against its other major trading partners.
The EUR had an incredibly mixed week losing some to the CAD and the USD while getting slaughtered by the GBP. After it took the GBP's punishment it did manage to retrace a little of what it lost but after five basically even weeks make no mistake, the GBP had its way with the EUR. It was flat against the JPY and AUD.
In the future, we can probably expect more the same dysfunction from the U.S. and U.K. governments. Monday is a Holiday in the U.S. with no major news or announcements coming out all week, though there will be some major news coming out of other areas of the world.