GBP rises despite political uncertainty -.....>

FOREX: GBP rises despite political uncertainty

- Risk appetite improved in Asia after the US-China trade spat failed to

escalate over the weekend. As the firmer tone spilled over into Europe, GBP &

AUD outperformed.

- Despite ongoing political uncertainty markets interpreted the earlier

resignation of David Davis now points toward a softer Brexit. GBPUSD reflected

this with a move to $1.3363 before stalling around the 23.6% retracement of the

2018 range $1.4377-1.3050.

- Improving risk appetite boosted the EUR. Having witnessed a bullish breakout

(See MNI Analysis email - Jul6 1607BST), EURUSD extended to $1.1781 targeting a

move toward the 38.2% retracement level at $1.1855. EURJPY cleared Y130.00

accelerating the move to Y130.17.

- AUD sits top of the G10 pile with gains of 0.58% against the USD. Commodity

based currencies fared well in Europe with added support from gold and oil

prices. AUDUSD touched $0.7479, NZDUSD extended its recovery off last week's

multi-year lows to $0.6850, CAD printed C$1.3080.