At the end of the European market on Tuesday (November 20), pound To USD Narrow range volatility was lower, and the current trading was in the front line of 1.2831. The rebound of sterling against the US dollar in the previous two trading days ended. The demand for US dollars rose and the risk of Britain's non agreement Brexit increased, putting pressure on the exchange rate. At present, the focus turned to the Brexit analysis report submitted by the Bank of England to Parliament.
According to foreign media, the Bank of England will send its analysis of the "exit from the EU agreement" to the Parliamentary Finance Committee on November 29. The report will include an analysis of the "no agreement, no transition" scenario and how it will affect monetary and financial stability.
A spokesman for the British Prime Minister said that she did not believe that Teresa May would agree with Juncker on the final version of the future framework at the meeting on Wednesday (November 21), which was part of the negotiation process.
Bank of England President Carney said that the risk of Brexit without an agreement is high to make people uneasy. In the case of Brexit without an agreement, one of the key issues is the speed of economic adjustment. We see that Brexit has an increasing impact on corporate behavior, which may lead to a decline in performance in the fourth quarter. Haldane, the chief economist of the Bank of England, also pointed out that Brexit without an agreement would have an immediate impact on supply and may also have an impact on demand.
On Monday (November 21), foreign media reported that 42 members of the Conservative Party had submitted their unbelief in Teresa May. However, 48 members of the Conservative Party needed their unbelief in order to trigger a vote of no confidence. At present, there is no further information in this regard on the market. Teresa May will go to Brussels to discuss trade issues within the day, and investors will also pay attention to the progress of the discussion.
The research team of Dominion Securities said that the concern of the UK's Brexit is still the focus, and will wait for whether the Conservative Party will meet the 48 letters needed to trigger a vote of no confidence in the leadership of Theresa May. In addition, several officials of the Bank of England, including President Carney, will testify in Parliament within the day, and the pound is still in the range of 1.2750-1.3250 against the dollar, Until political risks abate, the upward resistance is still quite strong.
HSBC Holdings pointed out that there are two downside risks facing sterling against the US dollar at present. One is the increasing possibility that the Brexit agreement cannot be passed in parliament, and the other is that the time for Brexit negotiations is about to run out, and the possibility of Brexit without an agreement is growing.
In the near future, British Prime Minister Theresa May may encounter a vote of no confidence. If she wins, the pound is only a temporary consolation, because this result cannot guarantee that the Brexit Agreement will be passed in Parliament. If she loses, the new Prime Minister may take a tougher negotiating position. But most importantly, no matter who is in power, there is not enough time for negotiations, The result of leaving Europe without agreement should come or will come.
Technically, sterling still fluctuates in a wide range against the dollar. Once it breaks through 1.2797, it may fall to 1.2724 and 1.2692 in the future. On the upside, the resistance levels are 1.2914, 1.2930 and 1.3074 respectively.
Yihuitong software of Huitong Finance showed that at 21:38 Beijing time, the pound was at 1.2831/33 against the dollar.
