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Listen, all the popcorn has already been eaten and they continued to aggravate the situation. The leader of the House of Commons has already resigned because of her disagreement with Theresa May's new plan in agreement with the European Union. Andrea Linds stated that she categorically disagreed with the possibility of holding a referendum on the ratification of the divorce agreement. Yet, this was only the tip of the iceberg as many ministers expressed their indignation at the fact that the provisions of the new version of the agreement voiced on Tuesday by Theresa May did not correspond to what was discussed by the cabinet. Although the Prime Minister from the rostrum of the House of Commons stated that this version of the agreement was agreed by all the ministers. So, there was the smell of Theresa May's early resignation in the UK and various media asserted that this could happen this weekend. I.e, Brexit will have to deal with her receiver. However, there is no time for this and the eviction of Great Britain from the European dormitory will take place according to the worst scenario - without an agreement. Even if Teresa May dares and issues an agreement to a vote of the House of Commons, the conservatives will definitely be rejected by the Laborists, as has been repeatedly stated. Furthermore, if the first three versions of the agreement suited at least one of the parliamentarians, those are not observed as we speak and of course, investors are now proceeding solely from the fact that the output will be tough and with unpredictable consequences for the British economy, which was reflected in the pound exchange rate. These sentiments themselves have a negative effect on the single European currency. At the same time, the eviction of the UK from a European dormitory will take place under the worst scenario, which is without an agreement.
But what saddens me the most was that all the popcorn ended precisely while watching the British joker, that is, before the minutes of the meeting of the Federal Commission on Open Market Operations were published. Yes, everyone was so stunned by what is happening in the United Kingdom that they completely forgot about this boring document, although its content is just fine. I will not go into details on how the leadership of the Federal Reserve System assesses the state of the labor market or inflationary dynamics and better get to the point. From the text of the protocol, the wording has disappeared not only regarding the timing of the increase in the refinancing rate but also about the interest rate increase itself in general. However, it found its place to be worded extremely vague that the Federal Commission for Operations in the open market will consider the question of future adjustments to the refinancing rate based on the general economic dynamics, as well as the state of the labor market and inflation compliance with target levels. That is - understand how you want. Everyone was so keen on the drama that unfolded in the United Kingdom that they did not notice such an interesting change in the position of the Federal Reserve System who can raise rates as well as lower them. Yes, and it can be done at any time.
The sequel to the exciting series called Brexit is scheduled for tomorrow. As for today in the UK, there are elections to the European Parliament and until it is known how serious the failure of the conservatives will be, no one will do or say anything. Tomorrow, there is a scheduled meeting between Theresa May and the leadership of the Conservative Party. Therefore, the lull on the Brexit issue will clearly have a beneficial effect on both the pound and the single European currency. Moreover, preliminary data on indices of business activity in Europe will be published today, which should show growth. In particular, the business activity index in the manufacturing sector should grow from 47.9 to 48.1, while in the service sector, growth is expected from 52.8 to 53.0. Thus, it is not surprising that a composite index of business activity is expected to increase from 51.5 to 51.7. Moreover, American statistics may somewhat disappoint investors due to a possible increase in the total number of applications for unemployment benefits as much as 13 thousand. Thus, the number of initial applications should increase by 10 thousand, and repeated ones by 3 thousand. Also, sales of new houses are likely will be reduced by 2.8%.
After reaching the value of 1.1142, the euro/dollar currency pair slowed down, resulting in an estimated flat to 1.1140/1.1170. It is likely to preserve fluctuations in these frames with a careful analysis of the boundaries.
The pound/dollar currency pair continues to delight traders downward movement, reaching as a result of the support level of 1.2620. It is likely to assume a primary stagnation is formed with a subsequent attempt to correct the quote due to a strong oversold within this level.
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