Brexit delay causes market chaos pushing the Aussie dollar lower

UK Prime Minister Theresa May has delayed the Brexit Vote in Parliament in fear of defeat, causing market volatility overnight.

Brexit delay causes market chaos

Markets have been affected after overnight Prime Minister May announced she would delay the Brexit vote in parliament, in fear of being defeated by MPs in the House of Commons.

This comes after her planned Brexit vote was originally scheduled to take place on Tuesday, after being warned that her deal would suffer a devastating defeat.

In turn the markets have been pushed into chaos, with traders trading cautiously amid Brexit news updates, which have caused market volatility.

Brexit delay pushes Aussie dollar down

The Aussie has been pushed down overnight in response to a possible Brexit no-deal, seeing uncertainty across forex markets, according to IG market analyst, Kyle Rodda.

“Fears of a no-deal Brexit outcome saw traders buying back into the USD. The stronger greenback has pushed the Aussie Dollar lower overnight, below support at around 0.7200.” Mr Rodda said.

Brexit pushes Sterling to weakest level since 2017

Sterling was pushed to its weakest level since 2017, falling to $1.2507 on Tuesday.

Shortly after the Brexit news broke yesterday, the pound fell 0.5% against the dollar to $1.2661.

The EUR/GBP continues rally

IG market Kyle Rodda says the Brexit delay has weighed on European equities.

“But in saying that, it remains subordinate to the large macro concerns about global growth -- that was the biggest driver of European equity market weakness overnight.

Despite all of Europe's woes, the pound is still being sold because traders are unwinding their bets of interest rate hikes from the BOE. This is manifesting in lower yields on UK Gilts.” Mr Rodda said.

The euro was flat at $1.354 after shedding 0.2 % yesterday.

Labour opposition leader Jeremy Corbyn reacted to the Brexit delay on twitter saying ‘While Theresa May continues to botch Brexit, our public services are at breaking pint and our communities suffer from dire under-investment.’

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