Sterling falls as automaker lobby warns of risks of no-deal Brexit

The price of crude oil was relatively unmoved after the war of words between Washington and Tehran escalated. Yesterday, Donald Trump signed executive orders authorizing fresh sanctions against Iranian leader, Ali Khamenei and his senior officials. New tariffs on the country’s respected Foreign Minister, Javad Zarif are expected to be announced later this week. In response, Iran termed the new sanctions ‘useless’ because the country is already under intense sanctions from the US. It also said that the sanctions ended any chances of dialogue between the two countries. Later today, the American Petroleum Institute (API) will release its inventories data. 

The New Zealand dollar rose today after impressive trade data. Data from the statistics office showed that the exports increased to N$5.81 billion, which was higher than the expected N$5.61 billion. In April, the country exported goods worth more than N$5.5 billion. In May, imports increased to $5.54 billion, which was higher than the expected N$5.40 billion. In the previous month, the imports were at N$5.12 billion. As a result, the trade surplus in May increased to more than N$264 million. Tomorrow, the Reserve Bank of New Zealand will release its interest rates decision. It is expected to leave rates unchanged.

The sterling declined sharply after the automobile industry continued to warn about the risks of a no-deal Brexit. In a report, the Society of Motor Manufacturers and Traders (SMMT) said that a hard or no-deal Brexit could cost as much as GBP 50K per minute from border delays. It could also lead to the end of borderless trade and usher in crippling disruptions in the industry. This will come at a tough period for the automobile industry, which is going through a global slowdown. 

EUR/USD

After days of a sustained upward rally, the EUR/USD pair pared some of those gains as traders focused on an upcoming speech by Jerome Powell. The pair dropped from the weekly high of 1.1412 to a low of 1.1375. On the four-hour chart, the pair’s price is above the 25-day and 50-day moving averages. The RSI, which was previously above the overbought level declined from a high of 82.32 to a low of 67. The signal and histogram of the MACD has paused the upward trend. The pair will likely continue moving lower to the important level of 1.1346, before resuming the upward trend.

NZD/USD

The NZD/USD pair moved higher after the impressive trade data. The pair reached a high of 0.6653, which was the highest level since June 10. On the hourly chart below, this price is above the short and medium-term moving averages. The RSI has remained slightly lower than the important overbought level while the momentum indicator is above the 100 level. The pair could remain along this level ahead of the tomorrow’s interest rates decision.

XBR/USD

The price of crude oil was relatively unchanged today as Iran and US tensions continued to rise. The benchmark Brent crude is trading at $63.68, which is slightly lower than this week’s high of $65.06. On the four-hour chart, the price is along the 25-day moving average and slightly above the 50-day moving average. The price is slightly above the 23.6 Fibonacci Retracement level. There is a likelihood that the price will remain at these levels as traders wait for more indications on the Iranian-Washington conflict.