Theresa May Brexit Speech Weighs on Pound Sterling Exchange Rates
Theresa May’s Brexit speech caused jitters on Friday, leaving the Pound on weak form versus many of its peers.
Although the Prime Minister did acknowledge that the UK recognised it cannot have everything it wanted from a Brexit deal, it was a confirmation that the government seeks to leave the single market and customs union markets.
Traders were especially disconcerted when Theresa May said that Brexit would have to see an end to the passport and rights enjoyed by financial services workers, which could significantly impact one of the UK’s dominant industries.
The vital UK services PMI for February is due for release shortly and could cause significant GBP volatility.
GBP/EUR Weakens despite Fears over Italian Election Weighing on Euro
Despite uncertainty ahead of this weekend’s Italian elections weighing on the Euro on Friday, the GBP/EUR exchange rate spent most of the day notching up losses.
The solid outlook for the Eurozone economy helped provide some support to the Euro, even after a weaker-than-expected recovery in January’s German retail sales.
Given the results of the Italian election, which saw populist and far-right parties dominate, the Euro is likely to be on weak form today and could ignore today’s medium and low-impact data releases.
GBP/USD Undulates as White House Announces Steel and Aluminium Tariffs
GBP/USD managed to record some gains around midday on Friday, but later ceded these again as the end of the day’s trading session approached.
The US Dollar received a boost from the announcement that the White House will impose harsh tariffs on aluminium and steel imports. However, this didn’t last long, as markets calculated that the US, with its relatively small domestic steel industry, may not benefit from the move.
The US ISM non-manufacturing composite index for February could weigh slightly on the US Dollar today given that forecasts are for a near one-point weakening to 59.
GBP/CAD Surges as Canadian Dollar Sinks on Fears over NAFTA Future
The GBP/CAD exchange rate recorded strong gains on Friday after the US announced new tariffs. This move confirmed a shift in attitude towards protectionism, which casts serious doubts over the future of the North American Free Trade Agreement.
GBP/AUD Struggles Higher as Trade War Fears Weaken Australian Dollar
The Pound faced a tough climb against the Australian Dollar on Friday, was eventually able to close the day higher than its opening levels.
Fears of a global trade war weighing on the Australian Dollar after the US administration announced it would be slapping tariffs on imports of aluminium and steel.
With the Australian economy still largely reliant upon iron ore exports, this does not bode well for it.
Weakening Global Risk Appetite on Trade War Fears Boosts GBP/NZD
The Pound New Zealand Dollar exchange rate managed to record solid gains and then hold them as the weekend approached.
With the US looking to implement trade tariffs, markets had little inclination to favour the currency of the export-centric New Zealand economy.