Pound Sterling Exchange Rate Daily Update: GBP Faces Volatility after Contempt of Parliament Vote

Pound Sterling (GBP) Exchange Rates Bolstered by Possibility of Article 50 Reversal

The Pound (GBP) was buoyed yesterday morning as a senior EU legal adviser suggested the UK could still unilaterally revoke Brexit without the consent of other EU members.

However Sterling gradually gave up some of these gains through the afternoon before falling sharply against some of its peers after the government was found in contempt of Parliament over its refusal to publish its full legal advice on Theresa May’s Brexit deal.

Looking ahead, the Pound could find itself ceding more ground later this morning as the UK’s latest Services PMI is expected to reveal growth in the UK’s largest wealth-generating sector remained subdued last month.

GBP/EUR Exchange Rate Steady as Eurozone PPI Speeds Up

After initially spiking on Tuesday morning, the Pound Euro (GBP/EUR) exchange rate closed yesterday’s session almost unchanged from its opening rate as the single currency was lifted by the Eurozone’s latest PPI figures.

This saw producer prices in the bloc accelerate faster than expected in October on the back of rising energy prices.

Meanwhile the release of the Eurozone’s latest retail sales figures may help to lift the Euro this morning as economists forecast sales growth will have rebounded in October after stalling at the end of the third quarter.

GBP/USD Exchange Rate Climbs on Fed Rate Speculation

The Pound US Dollar (GBP/USD) exchange rate climbed as much as 0.7% on Tuesday as markets shunned the ‘Greenback’ amid speculation the Federal Reserve will slow or even pause its monetary tightening as it goes forward.

Analysts suggest recent dovish remarks from the Fed signal the bank will target two or fewer hikes in 2019, down from previous expectations of a solid three rate hikes.

However the US Dollar could strike back today, with ISM’s non-manufacturing PMI forecast to show growth in the US service sector remained robust in November.

GBP/CAD Exchange Rate Stable as BoC Rate Decision Looms

The Pound Canadian Dollar (GBP/CAD) exchange rate saw only limited gains on Tuesday as CAD investors brace for today’s rate decision by the Bank of Canada (BoC).

While the BoC is not expected to raise rates this month, we could see the ‘Loonie’ move sharply higher if it signals a February hike is on the cards.

GBP/AUD Exchange Rate Rallies as Australian GDP Slows

After struggling to hold onto its gains during yesterday’s European session, the Pound Australian Dollar (GBP/AUD) exchange rate shot higher overnight as the ‘Aussie’ was undermined by a sharp drop in growth in the third quarter, leading some economists to suggest the next move by the Reserve Bank of Australia may be a rate cut rather than a hike.

GBP/NZD Exchange Rate Steadies as Dairy Prices Rise

The Pound New Zealand Dollar (GBP/NZD) exchange rate ultimately made very little progress on Tuesday with the ‘Kiwi’ rebuffing Sterling advances in the afternoon as NZD investors cheered the first rise in dairy prices since May following the latest global dairy auction.

Luke Trevail

Luke studied Journalism at university but quickly moved into the financial sector, initially working in retail banking before joining TorFX in 2007. As a Senior Account Manager Luke assists in overseeing the management of the company’s exposure to currency volatility. He uses his years of foreign exchange experience to produce regular news updates exploring the latest currency movements.

Contact Luke Trevail