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UK Parliament to resume today as Supreme Court cancels prorogation

All eyes are on the developments in Westminster today as Boris Johnson will face an angry Parliament amid widespread calls for his resignation.

Sterling has sharpest rise for decade as Boris wins election

The UK Supreme Court ruled yesterday that Boris Johnson’s advice to the Queen to prorogue Parliament until 14 October was “unlawful, void and of no effect”, adding that “as Parliament is not prorogued, it is for Parliament to decide what to do next”.

The verdict boosted Sterling which traded above $1.2500 against the greenback for a while, and ended the day comfortably above €1.1300 against the single currency. Now that Parliament will be allowed to debate further on any potential deals, market participants seem more optimistic that a no-deal Brexit can be less likely.

The British prime minister had insisted before the verdict that he would not resign if the Supreme Court was to rule against him. Instead, he brushed aside calls from Jeremy Corbyn and other UK party leaders to resign and told reporters outside the UN building in New York that a general election should be called.

While at the UN, US President Donald Trump’s speech at the summit hit stock markets after he openly criticised the World Trade Organization (WTO). He said the organisation required significant changes and that China should not be allowed to “game the system” over trade, accusing the latter of stealing intellectual property. Beijing is unlikely to welcome these comments, especially as Sino-US trade talks are about to begin.

Today there are no top-tier data releases, so markets will focus on developments in Westminster. Despite there not being enough time to organise a full Prime Minister’s Questions, I would expect a fiery debate which could set the direction for the currency market.

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