The British Prime Minister has terminated the opposition’s move to avoid a no-deal Brexit. The pound is falling lower amid the news. So, the pound is extending weakness. Political turmoil in the UK pushes traders to lock in profits on long positions after a two-week growth. Boris Johnson’s decision to suspend the Parliament is seen as a counter measure against the opposition which hopes to pass a law stopping a no-deal Brexit in October. So the Brexit at any cost is becoming a real prospect now. Traders have reasons to worry as British Parliament returns to work next week but just for a few days. To revive the sterling, financial markets need to see a quick response from the opposition. Meanwhile, the pound/dollar pair is trading firmly lower at 1.2187. Likewise, the European currency is also losing ground, extending losses against the dollar. The euro/dollar pair settled down at 1.1074. Today, traders focus on inflation data from Germany. The reading for August will provide clues to inflation data for the whole eurozone that is due tomorrow. The inflation data will be crucial for the ECB to determine the size of the stimulus package at the nearest policy meeting. Gold prices halted the rapid rally during
the European session. Gold dropped to 1,547 US dollars 30 cents a troy ounce. Other safe-haven assets are following the downward trajectory. Risk appetite is growing slowly amid promising comments from Chinese officials. Despite recent escalation of the conflict, Chinese trade negotiators are expected to visit Washington in September. Traders are taking this news with a pinch of salt. In fact, such statements are very unreliable and do not change the situation in general. Markets are waiting for a further gold rally after a correctional pullback.