In its latest analysis of the UK’s credit status, S&P revised its outlook of ‘AA’ rating to stable from the previously announced negative. The global rating agency also sounds optimistic concerning the Brexit after the recent election.
Key quotes
“UK’s conservative’s newfound majority should clear passage of withdrawal agreement bill through parliament, diminishing risk of no-deal Brexit.”
“The UK will ultimately seek an extension to the transition period beyond December 2020.”
FX implications
Given the market’s emphasis on the US-China trade headlines during the Asian session, such second-tier news generally fails to generate any major response. That said, the GBP/USD pair seesaws around 1.3130 after the media release. It’s worth mentioning that the cable registered that heaviest declines in 13 months the previous day, Tuesday, as fears of hard Brexit emerged.
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