Pound Sterling (GBP) Rocked by Brexit Vote
The Pound (GBP) was met by heavy losses on Tuesday, relinquishing almost all of Monday’s gains as it became clear MPs would reject Theresa May’s Brexit deal.
MPs ultimately voted 391 to 242 to reject the deal yesterday evening, as the concessions granted by the EU on the Irish backstop were not enough to reassure MPs that the UK would not remain tied to the EU indefinitely.
However the Pound looks poised to rally later this evening, with MPs widely expected to reject the prospect of a no-deal Brexit in another debate this evening.
GBP/EUR Exchange Rate Retreats from 2019 High amid Brexit Anxiety
The Pound Euro (GBP/EUR) exchange rate fell sharply ahead of yesterday’s Brexit vote after the UK’s attorney general, Geoffrey Cox published his advice on Theresa May’s revised Brexit deal.
This appeared to be the death knell for the withdrawal deal as Cox warned the new deal did not eliminate the risk that the UK could be stuck in the EU customs union indefinitely.
Coming up later this morning is the release of the Eurozone’s latest industrial production figures, which could put some pressure on the Euro if they mirror the fall in German factory output and contract in January.
GBP/USD Exchange Rate Losses Trimmed by Dip in US Inflation
While the Pound US Dollar (GBP/USD) exchange rate also fell heavily on Tuesday, the pairing’s losses were trimmed in the US session by the release of the latest US CPI figures.
These revealed that both underlying and headline inflation weakened in February, limiting the upside in the ‘Greenback’ as it further dented hopes that the Federal Reserve would raise interest rates this year.
Potentially applying further pressure to the US Dollar today will be the publication of US durable goods orders, with a contraction at the start of 2019 likely to stoke fears of a slowdown in the US economy.
GBP/CAD Exchange Rate Slides as Oil Prices Rise
The Pound Canadian Dollar (GBP/CAD) exchange rate fell as much as two cents during the European session yesterday, with the oil-sensitive ‘Loonie’ firming as crude prices continued to climb.
GBP/AUD Exchange Rate Rallies as Australian Consumer Confidence Sinks
After falling through Tuesday’s session the Pound Australian Dollar (GBP/AUD) exchange rate bounced back overnight, as Australian consumer confidence tumbled in March amid worries of a rise in unemployment over the coming year.
GBP/NZD Exchange Rate Strengthens on Australia Concerns
The Pound New Zealand Dollar (GBP/NZD) exchange rate also rallied overnight on Tuesday as the ‘Kiwi’ fell in step with the ‘Aussie’ following the release of Australia’s latest consumer sentiment figures amid fears of similar pessimism spreading to New Zealand.