Pound Sterling (GBP) Undermined by Rising Political Uncertainty
The Pound (GBP) fell back against the majority of its peers yesterday as political uncertainty in the UK continued to limit the appeal of GBP.
While Boris Johnson remains the favourite to replace Theresa May as PM, recent headlines regarding a row with his partner and his refusal to address them appear to have taken some of the wind out of his campaign’s sails, casting further uncertainty over the whole process and dragging on Sterling sentiment.
On top of the ongoing political uncertainty, GBP investors will also have the Confederation of British Industry’s latest retail report to focus on today. It could place further pressure on the Pound if retail activity remained weak this month.
GBP/EUR Exchange Rate Losses Trimmed by Gloomy German Business Sentiment
The Pound Euro (GBP/EUR) exchange rate weakened on Monday, but was prevented from recording any major losses as the single currency’s advance was undermined by a slide in business sentiment in Germany.
Munich-based research group IFO reported that business sentiment in the Eurozone’s largest economy fell to its lowest levels since 2014 this month as firms become increasingly unnerved by global trade risks.
In the absence of any notable Eurozone data today, we may see the Euro relinquish some ground as EUR investors dwell on the European Central Bank’s recent hints that it could cut interest rates in the near term.
GBP/USD Exchange Rate Muted as Trump Launches another Attack on the Fed
The Pound US Dollar (GBP/USD) exchange rate was one of the few Sterling pairings to remain relatively steady at the start of this week’s session.
This came as Donald Trump launched another attack on the Federal Reserve on Twitter, accusing the US central bank of undermining the US recovery and denting the appeal of USD.
A speech by Fed Chair Jerome Powell on the topic ‘economic outlook and monetary policy’ will be in focus today, with Powell potentially driving the US Dollar lower if he communicates a clearer message on whether the bank will lower interest rates next week.
GBP/CAD Exchange Rate Slips as Oil Remains Buoyed
The Pound Canadian Dollar (GBP/CAD) exchange rate was on the defensive on Monday with the oil-sensitive ‘Loonie’ rising against a weakened Sterling as crude prices remained buoyed thanks to ongoing tensions in the Middle East.
GBP/AUD Exchange Rate Sinks on Rising Risk Appetite
The Pound to Australian Dollar (GBP/AUD) exchange rate fell over half a cent at the start of this week’s session as the ‘Aussie’ was buoyed by some hawkish comments from Reserve Bank of Australia (RBA) Governor Philip Lowe as well as the broad weakness in the US Dollar.
GBP/NZD Exchange Rate Slides on NZ Trade Figures
The Pound to New Zealand Dollar (GBP/NZD) exchange rate fell to a two-week low overnight on Monday, with the ‘Kiwi’ being buoyed by some robust trade data.
However we expect the New Zealand Dollar to struggle to carry this momentum into today’s session as NZD investors brace for the conclusion of the Reserve Bank of New Zealand’s (RBNZ) June policy meeting later tonight.