• The British pound rebounded on Tuesday as fears faded that the departure of two ministers would prompt an immediate challenge to Prime Minister Theresa May’s leadership, while the yen fell against the dollar as investors bid up riskier assets.
Sterling turned positive on the day and rose to $1.3272, having fallen to as low as $1.3189 on Monday, after May’s foreign minister and Brexit negotiator quit in protest at her plans to keep close trade ties with the European Union.
The dollar rose 0.2 percent against the Japanese yen, a currency usually bought during times of political uncertainty, to 111.08 yen, above the 111-yen handle for the first time since Tuesday last week and approaching a six-month high.
The dollar’s index against a basket of six major currencies rose to 94.230 after falling on Monday to 93.711 , its lowest since mid-June.
• A slate of data is due with UK manufacturing and monthly GDP numbers due shortly.
However, recent improvement in economic data and upbeat comments from Bank of England Governor Mark Carney has lifted expectations of an August rate hike to more than 70 percent from less than 50 percent two weeks ago.
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• Currently we're looking at Harmonic Pattern - Bearish Cypher on H4 Chart of British pound against the dollar,
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STOP LOSS - 1.34020
TARGET1 - 1.32662
TARGET2 - 1.31544
• China is looking to the European Union as its new best friend amid trade frictions with the United States.
Prime Minister Li Keqiang met eastern and central European leaders in Sofia, Bulgaria, on Saturday, and vowed to open up China’s economy to the wider world. Keqiang is also meeting German Chancellor Angela Merkel on Monday and next week, in Beijing, he will host an EU-China summit.
• British Prime Minister Theresa May holds a meeting of her cabinet on Tuesday, a day after her government was thrown into turmoil when two senior ministers quit in protest at her plans for trade ties with the European Union after Brexit.
However, at a meeting with her Conservative Party lawmakers, she was cheered and applauded by many as she warned them that internal squabbling could pave the way for socialist opposition leader Jeremy Corbyn to take power instead.
• President Donald Trump nominated Brett Kavanaugh for the U.S. Supreme Court on Monday as he aimed to entrench its conservative control for years to come, but the federal appeals court judge faces a tough confirmation fight in the bitterly divided Senate.
While some Democrats promised a stern effort to block the 53-year-old Kavanaugh - who has served 12 years on the most influential U.S. appeals court - Trump’s fellow Republicans control the Senate by a narrow margin and can ensure confirmation if they avoid defections from their ranks.
• Switzerland has launched a complaint at the World Trade Organization against U.S. tariffs on steel and aluminum, it said on Tuesday, the eighth WTO member to start such a challenge.
Under WTO rules, the United States has 60 days to settle the issue. After that time, Switzerland could escalate the dispute by asking the WTO to set up a panel of judges to adjudicate.
• Japan’s government on Tuesday appointed career bureaucrat Toshihide Endo as its top financial regulator, a move widely seen as a sign that reforms to make the banking sector more profitable will continue.
• Oil prices rose on Tuesday on escalating concerns over potential supply shortages, with Brent crude leading the way as hundreds of oil workers in Norway were set to strike later in the day.
Brent crude LCOc1 added 55 cents, or 0.7 percent, to $78.62 per barrel by 0638 GMT, following a 1.2-percent climb on Monday.
U.S. light crude futures were up 47 cents, or 0.7 percent, at $74.32.
Reference: Reuters, CNBC, FXStreet, DailyFX, Investing
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