Pound Sterling (GBP) Exchange Rates Stumble Following Brexit Setback
The Pound (GBP) fell back against the majority of its peers at the end of last week’s session as investors raised concerns that a dispute over the Irish border could derail a Brexit agreement.
These fears appeared well founded as Brexit talks broke down over the weekend, dashing any latent hopes that a deal may be finalised today.
With no further talks planned before the EU summit on Wednesday, analysts are suggesting there is little chance of Brexit negotiations being wrapped up in November, leading markets to brace for further losses over the coming week.
GBP/EUR Exchange Rate Muted as Italy Defies EU to Push Through Budget
The Pound Euro (GBP/EUR) exchange rate losses were tempered on Friday as Rome reopened its row with Brussels as it pushed through a controversial budget which flouts EU deficit rules.
Rome formally presents its draft budget to the EU later today, with investors fearing the clash could undermine growth in the Eurozone if it results in the bloc’s third largest economy facing punitive measures from its EU partners.
In the absence of any other notable data this will likely leave the issue in focus throughout today’s session, potentially prompting further weakness in the currency.
GBP/USD Exchange Rate Slumps as Global Stock Markets Rebound
The Pound US Dollar (GBP/USD) exchange rate fell by as much as 0.6% on Friday, with the US currency rallying in line with the rebound in global stock markets.
Building on this, the US Dollar looks set to enjoy a strong start to this week’s session as economists forecast today’s US retail sales data will show an acceleration for last month.
GBP/AUD Exchange Rate Slides despite Subdued Risk Appetite
The Pound Australian Dollar (GBP/AUD) exchange rate slumped on Friday, being one of the few ‘Aussie’ pairings to actually weaken at the end of last week as rising Brexit uncertainty offset pressure on AUD due to sliding market risk appetite.
GBP/NZD Exchange Rate Weakens on Rising Brexit Uncertainty
The Pound New Zealand Dollar (GBP/NZD) exchange rate largely mirrored movement in GBP/AUD on Friday as Brexit uncertainty allowed NZD to advance despite falling risk sentiment.
Looking ahead the ‘Kiwi’ may appreciate further overnight, as New Zealand’s latest CPI data is expected to confirm inflation accelerated in the third quarter, potentially leading to a more hawkish outlook from the Reserve Bank of New Zealand (RBNZ) at its future policy meetings.