Article / 27 June 2016 at 23:46 GMT

US Market Wrap: Another Brexit? S&P boots UK out of AAA club

FX Trade Strategist /


  • Nothing of note                                                       

US Data released :

  • Markit PMI Composite (preliminary) June-(Actual 51.2 vs. forecast 50.9) 

When it rains it pours and British residents know that as well as most. Today, S&P cut the UK’s coveted AAA credit rating to AA. Making matters worse, tiny Iceland, (population 323,002) eliminated proud England from the Euro championship.  

Naturally, sterling flows hogged the spotlight. GBPUSD traded erratically within a 1.3120-1.3250 band and closed on an “up” note. EURUSD trading mirrored GBPUSD moves. USDJPY touched the day’s low before breakfast and then climbed steadily throughout the day.

US equity traders took their cue from European traders and sold equities in a choppy session. The major indices all closed in the red but were off the day’s worst levels as the fall-out from the Brexit vote reverberates around the globe.

Oil prices were on the defensive right from the start. They slid steadily until mid afternoon when WTI bounced off of $45.81 to close at $45.50. The oil story is the Brexit story with a bit of supply/demand issues thrown in.

S&P cut the UK’s AAA credit rating to AA, but the Iceland news was worse. Photo: iStock


An interesting view of Brexit is by TradingFloor contributor, Nadia Karakova who writes: How Brexit looks and feels as a Russian in London

Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.

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