Pound Sterling (GBP) Weakens as May’s Future Hangs in the Balance
The Pound (GBP) fell back against the majority of its peers on Tuesday, as UK politics was back in focus with calls for Theresa May to step down as PM growing ever lounder.
Suggestions that May could resign after the EU elections were floated yesterday as she met with Sir Graham Brady, chair of the 1922 Committee of Tory backbenchers, who have called for the PM to set a resignation date.
The absence of any impactful UK data today is likely to result in Sterling remaining highly sensitive to political developments, with GBP exchange rates likely to suffer if cross-party Brexit talks remain in a deadlock
GBP/EUR Exchange Rate Dips Despite Gloomy German Growth Forecasts
The Pound Euro (GBP/EUR) exchange rate edged lower yesterday, with the single currency making some headway despite the European Commission’s slashing its growth forecasts for 2019.
The EC’s forecasts were particularly damning for Germany, with growth expectation for the Eurozone’s largest economy being more than halved from 1.1% to just 0.5% as its manufacturing sector continues to struggle.
Coming up today we have a speech by European Central Bank (ECB) President Mario Draghi, which is likely dent the Euro if he reaffirms the bank’s cautious outlook for the coming year.
GBP/USD Exchange Rate Slides as Markets Risk-Off
The Pound US Dollar (GBP/USD) exchange rate fell around half a cent through Tuesday’s session as investors flocked to the safe-haven ‘Greenback’.
This was driven by renewed trade tensions between the US and China after Washington threatened to hike tariffs from 10% to 20% on $200bn worth of Chinese goods in response to an apparent push back from Beijing on the terms already agreed in trade talks.
These trade concerns may continue to buoy the US Dollar throughout today’s session as well, especially if China seeks to retaliate over Washington’s latest threat.
GBP/CAD Exchange Rate Steady as Oil Slips Below $70
The Pound Canadian Dollar (GBP/CAD) exchange rate was able to avoid falling back yesterday, as the oil-sensitive ‘Loonie’ was weakened by a sharp drop in oil prices that sent Brent Crude back below $70 a barrel.
GBP/AUD Exchange Rate Steadies as Chinese Exports Tumble
After slumping on Tuesday, the Pound Australian Dollar (GBP/AUD) exchange rate found its footing overnight, as the ‘Aussie’ was tempered by Chinese trade data after exports unexpectedly contracted in April.
GBP/NZD Exchange Rate Volatile as RBNZ Cuts Rates
The Pound to New Zealand Dollar (GBP/NZD) exchange rate briefly surged overnight on Tuesday, following the Reserve Bank of New Zealand’s (RBNZ) decision to lower interest rates to a new record low in response to lacklustre domestic inflation and employment.
However with the move already being priced in by markets and Brexit uncertainties growing, the pairing quickly gave up these gains.