GBP Higher on Efforts to Stave Off Hard Brexit

Attempts in the UK Parliament to block a “no-deal Brexit” have helped to lift the Pound higher against the US Dollar and the Euro. The Labour Party, the primary opposition to the Conservatives, has said that they would attempt to push through legislation that would prevent Britain from leaving the E.U. Without a deal when the October 31st deadline is breached. Given that the front runner to replace Theresa May is a well-known Eurosceptic, should Boris Johnson take over the PM's seat this could at least cause him to sit up and take notice that hard Brexit is unpalatable for many legislators.

As reported at 11:19 am (GMT) in London, the GBP/USD was trading higher at $1.2750, a gain of 0.2217%; the pair is moving away from the earlier high of $1.2753 while the low was recorded at $1.2720. The EUR/GBP is lower at 0.8886 Pence, down 0.1483%; the pair has ranged from a trough of 0.88819 Pence to a high of 0.89123 Pence.

Draghi Takes a Cautious Stance

In the Eurozone, a speech given by the head of the European Central Bank was carefully scrutinized by investors for clues as to the way forward for the central bank. Mario Draghi said that economies within central Europe were susceptible to the escalating global trade war, especially because they are heavily reliant on foreign trade. He fears that these industries, naming especially the car manufacturing industry, would be vulnerable to shocks and tariffs. Goods that must cross EU borders a number of times would all have a tariff heaped upon it, escalating production prices. For analysts, that suggested that the ECB will continue to exercise caution as regards monetary policy, with a likely postponement of a tightening phase. The EUR/USD was trading at $1.1323, down 0.0371%.