Pound Sterling (GBP) Slips on McDonnell Brexit Deal Warning
The Pound (GBP) stumbled on Tuesday as it was hit by a bout of profit taking following some genuine Brexit concerns being raised after the Labour party’s John McDonnell said that most MPs from his party would not back Theresa May’s withdrawal deal.
This followed the release of the UK’s latest Services PMI earlier in the session, where a rise in headline figures failed to mask underlying weakness in the sector and the drop in staff levels.
Looking ahead, the focus is likely to remain on Brexit throughout the second half of this week’s session, amidst a lull in notable UK data.
GBP/EUR Exchange Rate Volatile as Eurozone Retail Sales Rebound
The Pound Euro (GBP/EUR) exchange rate traded in a wide range yesterday as the single currency found fleeting support thanks to a stronger-than-expected rebound in Eurozone retail sales growth in January.
Eurostat reported that sales growth rocketed from -1.4% to 1.3% at the start of 2019 as consumer confidence picked back up thanks to falling employment and rising wages.
However any further upside in the Euro is likely to be limited today, with EUR investors expected to remain wary ahead of the European Central Bank’s (ECB) rate decision on Thursday.
GBP/USD Exchange Rate Slumps as US Service Sector Impresses
The Pound US Dollar (GBP/USD) exchange rate slipped almost half a cent during Tuesday’s trading session, as USD investors welcomed the latest US services PMI.
According to the ISM non-manufacturing index, the US service sector enjoyed a notable pick-up in activity last month, with growth striking a three-month high following a jump in employment and new orders.
In the focus today will be the release of the latest ADP employment figures, with USD investors looking out for any hints on how US payrolls may have fared in February.
GBP/CAD Exchange Rate Subdued Ahead of BoC Rate Decision
While the Pound Canadian Dollar (GBP/CAD) exchange rate slipped yesterday, the pairing was prevented from registering any major losses ahead of the Bank of Canada’s (BoC) rate decision later today.
While no policy changes are expected from the bank, analysts are forecasting the BoC will adopt a more cautious tone in light of weak domestic growth and a stuttering global economy.
GBP/AUD Exchange Rate Surges as Australian GDP Disappoints
After stumbling through Tuesday’s session, the Pound Australian Dollar (GBP/AUD) exchange rate roared back to life overnight as the ‘Aussie’ was battered as domestic GDP was shown to have expanded just 1% in the second half of 2018, a notable slump from the 4% seen in the first six months.
GBP/NZD Exchange Rate Jumps as Risk Appetite Weakens
The Pound New Zealand Dollar (GBP/NZD) exchange rate also rallied overnight on Tuesday as the drop in Australian GDP rippled through markets, leading to a sharp downturn in market risk appetite.