Pound Sterling (GBP) Trades Lower as Cross-Party Talks Collapse
Pound Sterling (GBP) exchange rates came under pressure at the close of last week as cross-party talks came to close without a deal being reached.
Writing to the PM, Labour leader Jeremy Corbyn suggested that talks had ‘gone as far as they can’ and that the ‘increasing weakness and instability’ of the government would make a deal impossible.
Looking to the start of this week, we may see the Pound attempt to mount a recovery on Tuesday if UK inflation is shown to have strengthened in April as forecast.
GBP/EUR Exchange Rate Undermined by US Car Tariff Delay
The Pound Euro (GBP/EUR) exchange rate extended its losses into a 10th consecutive session on Friday, its worst run of losses in almost 20 years.
Driving the single currency higher at the end of the week was a confirmation from the White House that it would delay tariffs on all car imports by at least six months.
Expect to see some volatility in the Euro through the coming week as markets brace for the EU elections, with any signs of a populist surge likely to dampen EUR sentiment.
GBP/USD Exchange Rate Slumps with US-China Trade Talks in Jeopardy
The Pound US Dollar (GBP/USD) exchange rate also moved lower on Friday as demand for the safe-haven ‘Greenback’ was bolstered by rising global trade tensions.
This came amid threats from Beijing that it would walk away from trade talks with the US, with an article from Chinese state media reading:
‘If there is no real concrete action by the United States, it will be meaningless for you to come and talk. It is better to suspend the consultation completely and return to the normal working track.’
Expect trade concerns to continue to dominate movement in the US Dollar again this week, with further gains likely if trade tensions continue to escalate.
GBP/CAD Exchange Rate Steady as Risk Appetite Slumps
The Pound Canadian Dollar (GBP/CAD) exchange rate held its ground at the end of last week, with the ‘Loonie’ unable to take advantage of Sterling’s weakness as it was itself undermined by a sharp drop in market risk appetite.
Australian Dollar (AUD) Climbs after Shock Australian Election Result
The Pound Australian Dollar exchange rate declined over the weekend as AUD was bolstered by the Liberal National Coalition’s surprise win in the Australian election.
Polls had indicated that the Labour party would triumph, but the unexpected outcome sent the Australian Dollar 0.8% higher against the US Dollar and Euro.
The election result is likely to continue dictating AUD movement this week, but the minutes from the latest Reserve Bank of Australia (RBA) policy meeting will also be of interest.
GBP/NZD Exchange Rate Drifts Lower
The Pound New Zealand Dollar (GBP/NZD) exchange rate softened slightly during the Australasian session despite New Zealand’s Performance of Services Index dipping from 52.3 to 51.8.
The New Zealand Dollar could benefit tomorrow if NZ credit card spending rises in April.