Pound Exchange Rates Daily Update: GBP/EUR Buoyed as Draghi Opens Door to Rate Cuts

Pound Sterling (GBP) Stabilises as Johnson Tops Tory Leadership Ballot

After initially trending lower yesterday, the Pound (GBP) was able to bounce back from its worst levels on Tuesday evening following the latest round of voting in the Conservative leadership contest.

Once again Boris Johnson topped the ballot, maintaining his clear lead over the other candidates, with Sterling firming as the political outlook becomes clearer and a Johnson premiership looking almost inevitable.

Looking ahead, the Pound may remain under pressure throughout today’s session as well as UK CPI figures are forecast to show that domestic inflation slowed in May.

GBP/EUR Exchange Rate Buoyed as Draghi Prompts Rate Cut Speculation

The Pound Euro (GBP/EUR) exchange rate drifted higher on Tuesday as European Central Bank (ECB) President Mario Draghi indicated that the bank is prepared to pump additional stimulus into the flagging Eurozone economy.

This immediately sent the Euro lower as analysts began to speculate about the chances of the ECB cutting interest rates and/or introducing further quantitative easing by the end of 2019.

In the absence of any notable Eurozone data today, the focus is likely to remain on the ECB as its annual Sintra conference continues, likely limiting the appeal of the Euro.

GBP/USD Exchange Rate Muted ahead of Fed Rate Decision

The Pound US Dollar (GBP/USD) exchange rate was left trading at a five-month low yesterday, with the pairing mostly rangebound as USD investors held their positions ahead of the Federal Reserve’s policy decision later this evening.

There has been considerable speculation in recent weeks that the next rate move by the Fed will be lower as it seeks to protect the US economy from the impact of Trump’s trade dispute with China.

In fact analysts now believe that a rate cut this year is now fully priced into USD, something which could prompt a surge in the US Dollar later this evening if Fed Chair Jerome Powell does appear dovish.

GBP/CAD Exchange Rate Strikes Fresh 2019 Low on Rising Oil Prices

Tuesday saw the Pound Canadian Dollar (GBP/CAD) exchange rate strike its worse levels so far this year as the oil-sensitive ‘Loonie’ was buoyed by an uptick in crude prices.

Expect to see this downtrend in GBP/CAD continue throughout today’s session as well if Canadian inflation accelerated as forecast in May.

GBP/AUD Exchange Rate Slumps as Risk Sentiment Improves

The Pound to Australian Dollar (GBP/AUD) exchange rate tumbled by over half a cent on Tuesday as the ‘Aussie’ shrugged off some dovish minutes from the Reserve Bank of Australia (RBA) thanks to an upswing in market risk sentiment.

GBP/NZD Exchange Rate Rebounds as Dairy Prices Sink

The Pound to New Zealand Dollar (GBP/NZD) exchange rate initially stumbled yesterday morning, before bouncing back in the afternoon after the ‘Kiwi’ was undermined by another fall in dairy prices.

Matthew Andrews

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