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Pound Falls Amid Brexit Uncertainties;AUD Slips as RBA Keeps Rates on Hold

2019-4-2 14:50:03Basics of Trading
Pound Falls Amid Brexit Uncertainties;AUD Slips as RBA Keeps Rates on Hold

The British pound fell on Tuesday in Asia after U.K. lawmakers rejected all alternative options to Prime Minister Theresa May’s Brexit deal.

The GBP/USD pair was down 0.2% to 1.3068 by 12:01 AM ET (04:01 GMT).

Traders are closely monitoring further developments on the Brexit after the U.K. parliament again rejected all alternative options to May’s withdrawal deal.

The four options that were rejected include a call on the government to negotiate a permanent customs union, the U.K joining the European Free Trade Association and European Economic Area (Common Market 2.0), a confirmatory public vote on the Brexit deal and a choice between no-deal Brexit or revoking Article 50 - stopping Brexit - if the EU does not agree to an extension.

The legal default, for now, will be for the U.K. to leave the European Union in 11 days.

“The House has voted in favor of nothing. As a result in 11 days time, the U.K. will leave the EU without an agreement unless the prime minister acts,” said Labour member of Parliament Hilary Benn.

Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies edged up 0.1% to 96.893.

A stronger-than-expected ISM manufacturing data was cited as a tailwind for the U.S. dollar.

ISM manufacturing data for March showed an uptick to 55.3, handily beating expectations of 54.5. A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12% of the U.S. economy.

"ISM Manufacturing for March came in above expectations and employment remains below cycle peaks but comfortably back near prevailing levels in 2018, as March showed the biggest one-month increase in three years. This points to a potentially strong NFP on Friday," BMO said in a note.

The USD/CNY pair gained 0.2% to 6.7198.

The AUD/USD pair slipped 0.1% on Tuesday morning after the Reserve Bank of Australia (RBA) held interest rates at 1.5% as expected.

The NZD/USD pair was down 0.4% to 0.6775.