Pound Sterling (GBP) Exchange Rates Sink as Political Uncertainty Grows
The Pound (GBP) initially weakened on Tuesday as a dip in UK wage growth left it vulnerable at the start of the European session.
Sentiment then slid further as markets became spooked by a surge in Brexit uncertainty as Prime Minister Theresa May faced further rebellion from within her own party.
Sterling could however rebound later today, with an expected lift in UK inflation likely to help buoy market sentiment.
GBP/EUR Exchange Rate Tumbles to Four-Month Low
The Pound Euro (GBP/EUR) exchange rate struck a four-month low yesterday as Theresa May’s position as PM began to look increasingly unstable.
Furthermore, a lull in domestic data releases left the currency exposed to the rest of its peers, leading to a fairly subdued performance against the other majors.
The Euro may find some direction today, with the publication of the Eurozone’s latest inflation figures likely to prompt some reaction in the single currency.
GBP/USD Exchange Rate Pressured by Upbeat Powell Testimony
The Pound US Dollar (GBP/USD) exchange rate slumped on Tuesday, with the pairing’s losses being accelerated by Federal Reserve Chair Jerome Powell’s testimony in front of the Senate Finance Committee.
The USD exchange rate was lifted as Powell appeared upbeat about continued growth in the US economy, while reinforcing the need to ‘keep gradually raising’ interest rates.
Powell’s testimony will continue on Wednesday, with movement in the US Dollar likely to remain focused on his outlook in the absence of any other notable data releases.
GBP/CAD Exchange Rate Muted as Oil Prices Stall
The Pound Canadian Dollar (GBP/CAD) exchange rate traded in a narrow range on Tuesday as muted movement in oil markets hampered the ‘Loonie’s’ potential to advance.
Meanwhile Canada’s stronger-than-expected manufacturing sales figures appearing to have minimal impact on the CAD exchange rate on Tuesday.
A continued lull in domestic data is likely to see the Canadian Dollar struggle on Wednesday, especially if a strong rise in US crude inventories prompts a drop in oil prices.
GBP/AUD Exchange Rate Rallies as Risk Appetite Recedes
The Pound Australian Dollar (GBP/AUD) exchange rate fell by around a cent on Tuesday, with the ‘Aussie’ able to take advantage of the slump in Sterling sentiment.
However the pairing appears to have reversed course again overnight, with a downturn in risk appetite driving the AUD exchange rate lower once again.
No major Australian data releases are scheduled for today’s session, but the Australian Dollar can be expected to steady as markets await Thursday’s jobs report.
GBP/NZD Exchange Rate Plummets Following RBNZ Inflation Estimate
The Pound New Zealand Dollar (GBP/NZD) exchange rate fell sharply on Tuesday, with a broad based rally in the ‘Kiwi’ following the Reserve Bank of New Zealand’s (RBNZ) latest underlying inflation estimate driving the pairing to new three-week low.
In the absence of any fresh domestic data today it remains to be seen if the New Zealand Dollar can sustain these gains, especially as market risk appetite begins to ease.