Pound Sterling (GBP) Exchange Rates Strengthen on ‘Secret’ Brexit Deal Talk
The Pound (GBP) got off to a strong start this week, gaining against the majority of its peers following a report suggesting Theresa May had struck a ‘secret’ deal for the UK to remain in the EU customs union.
The Sunday Times suggested the deal would help prevent a hard border with the Republic of Ireland and bolstered hopes a deal could be finalised by the end of November.
However Sterling gains were clipped somewhat by the release of the UK’s latest Services PMI, with a sharp slowdown in service sector growth raising concerns about the state of the UK economy at the start of the fourth quarter.
Looking ahead, a lull in data until Friday will likely see Brexit remain the main catalyst for movement in GBP for much of the week, potentially leading to further gains if developments remain positive.
GBP/EUR Exchange Rate Gains amid Ongoing Italy Budget Concerns
After testing the waters late last week, the Pound Euro (GBP/EUR) exchange rate appeared to stabilise above €1.14 on Monday, as EUR investors became increasingly bearish on Italy.
This comes as Rome remained steadfast in its refusal to back down over its budget, with Italian Deputy PM Luigi Di Maio’s suggestion that Italy’s spending plans could be emulated around Europe spooking a few investors.
Meanwhile the release of the Eurozone’s final Services PMI reading for October could leave the Euro under pressure today if it slips further than expected, similarly to the Manufacturing PMI.
GBP/USD Exchange Rate Advances in Run up to US Mid-term Election
The Pound US Dollar (GBP/USD) exchange rate traded close to a two-week high on Monday, with markets shying away from the ‘Greenback’ ahead of the US midterm elections.
This growing political uncertainty in the US dominated USD exchange rates at the start of the week, with markets willing to overlook the release of a stronger-than-expected ISM non-manufacturing PMI.
With markets bracing for a possible upset in today’s elections there’s a good chance we could see further weakness in the US Dollar throughout the latter part of Tuesday’s trading session.
GBP/CAD Exchange Rate Rangebound as Oil Prices Rise
The Pound Canadian Dollar (GBP/CAD) exchange rate was left to tread water yesterday, with Sterling unable to push higher against the oil-sensitive ‘Loonie’ as Brexit crude prices rose over 1% on fears that US sanctions against Iran could limit global supplies.
GBP/AUD Exchange Rate Steady as RBA Keeps Rates on Hold
The Pound Australian Dollar (GBP/AUD) exchange rate climbed over half a cent on Monday, with the pairing then consolidating these gains overnight as the Reserve Bank of Australia (RBA) voted to leave rates on hold as it concluded its November policy meeting, but struck a more upbeat tone in its outlook for the economy.
GBP/NZD Exchange Rate Gains as Risk Sentiment Slides
The Pound New Zealand Dollar (GBP/NZD) exchange rate surged by over a cent at the start of the week as the uncertainty surrounding the US midterm elections saw investors shy away from risk-sensitive currencies like the ‘Kiwi’
Looking ahead, the release of New Zealand’s latest labour report may see the New Zealand Dollar strengthen later this evening if the third quarter brought a sizable jump in employment growth.