Rates as of 0500 GMT

Market Recap

Not much going on in the FX market this morning overall changes are quite limited. There are only two moves worth noting CHF moving up and GBP moving down.

Its simple to explain the decline in GBP the EU launched legal action against Britain over alleged breaches of the Brexit deal on Northern Ireland. Brussels said steps by the UK government to unilaterally ease trading conditions for Northern Irish businesses amounted to a breach of the Brexit treaty. The process could result in Britain being taken to the European Court of Justice and facing trade sanctions. Thats all British industry needs. When you consider that UK exports to the EU have been around 48 of total UK exports 20152019, and when you look at what happened to UK exports to the EU immediately after Brexit anyway 40.5 mom vs 3.6 mom for exports elsewhere you can see the toll that this could take on British industry. Of course, if you can see that, you can probably see what Brexit was a bad idea for the UK to begin with, but thats another story.

Ive been fundamentally bearish on GBP for ages now based on the idea that Brexit would be a neverending disaster for the country. So far Ive been largely correct on my economic analysis but not on the market impact. Either the conclusion was so deeply baked into the market ahead of time after all, the referendum was in 2016 so there were years to get used to the idea or the possibility of a hard Brexit was so prominent in…