(14 February 2020)DAILY MARKET BRIEF 2:Pound jumps past $1.30 after BoJo’s cabinet reshuffle

The euro tanked to 1.0838 against the US dollar. Trend and momentum indicators remain comfortably negative, but the relative strength index (at 21.75%) warns that the single currency may have been sold too fast in a too short period of time and it could soon be time for an upside correction. Support is seen before the 1.08 mark.

The British pound was a bit shaken on Thursday by the unexpected departure of the Chancellor of Exchequer Sajid Javid - who by the way has been the shortest serving finance minister in the history of the UK, then rebounded past the 1.30 mark on news that Rishi Sunak, who was involved in the creation of the March budget, was appointed. The downside swing in Sterling due to political shenanigans is not the first and will probably not be the last as we step into the critical phase of Brexit negotiations. While Cable could find some strength to extend recovery above the 1.30 level, it will certainly find it tricky to stay sustainably above this level.

The FTSE 100 dived below the 7500p mark on Thursday and will certainly consolidate below this level before the weekly closing bell, even though the blue-chip index is expected to make a marginally positive start to the Friday’s session.

By Ipek Ozkardeskaya