Trade tensions dominate the market still

Daily Currency Update

GBP - British PoundAway from the rising trade tensions between the US and China the market is also keeping its eyes on any Brexit developments and the big news overnight is that Boris Johnson has no desires to go back to Brussels and renegotiate the Withdrawal Agreement. If true, this flies in the face of the assumptions made by many investors that assumed the new Prime Minister was just posturing with Brussels before going back to the negotiating table ultimately leading to another Brexit extension. For Johnson, the prospect of not renegotiating the Brexit deal makes sense, particularly with the Conservative party losing the Brecon and Radnorshire by-election last week which saw the government's tiny majority halved. With such a small majority the chances of the PM getting any renegotiated deal through would be improbable so instead reports point to Johnson and his advisors planning a 'people vs politicians' campaign.This spells further bad news for the pound with volatility only set to increase. Indeed sterling at the moment is acting more and more like an emerging market currency, characterised by political uncertainty and high volatility. Away from all of this (almost) yesterday UK Services PMI marginally beat expectations and helped keep the UK afloat ahead of Friday's important GDP numbers.