Swelling Public Deficit Fails to Stifle Rally in Pound Sterling (GBP) Exchange Rates
The Pound (GBP) moved broadly higher on Friday, with GBP exchange rates closing out the session close to the week’s opening levels thanks to some bullish buying.
However, somewhat capping Sterling’s recovery was the publication of the UK’s latest borrowing figures as they revealed the public deficit swelled in June.
Looking to the week ahead we expect trade in the Pound to remain volatile as markets brace for a new Prime Minister and a cabinet that may seek a harder Brexit.
Fears Italy’s Government may Collapse Spurs Gains in GBP/EUR Exchange Rate
The Pound to Euro (GBP/EUR) exchange rate drifted higher at the end of last week’s session, with the pairing striking its best levels since Monday as the single currency was weakened by fears Italy’s coalition government is close to collapsing.
After weeks of growing tensions between the two ruling parties, leader of League Matteo Salvini openly criticised his Five Star partners on Friday, stoking speculation that in light of the League’s strong polling numbers, Salvini may push for fresh elections.
Meanwhile movement in the Euro this week is likely to revolve around the European Central Bank’s latest policy meeting, with the bank expected to expand on its stimulus plans.
GBP/USD Exchange Rate Stabilises as Trump Attacks the Fed
The Pound to US Dollar (GBP/USD) exchange rate was mostly rangebound at the end of last week, with the pairing consolidating Thursday’s gains after President Trump launched another attack on the Federal Reserve.
In what is becoming something of a regular occurrence, Trump took to Twitter to criticise the Fed’s monetary policy, calling for the US central bank to cut interest rates dramatically.
Coming up this week we have the publication of the latest US GDP figures, with the US Dollar likely to face some pressure if the US economy slowed in the second quarter in line with expectations.
GBP/CAD Exchange Rate Buoyed as Canadian Retail Sales Disappoint
The Pound to Canadian Dollar (GBP/CAD) exchange rate accelerated on Friday, with the pairing striking its best levels since the start of the week as the ‘Loonie’ was undermined by a shock slump in Canadian retail sales in May.
GBP/AUD Exchange Rate Flat as Geopolitical Tensions Rise
Trade in the Pound Australian Dollar (GBP/AUD) exchange rate was muted on Friday and remains so at the start of this week’s session as rising geopolitical tensions keep demand for the risk-sensitive ‘Aussie’ in check despite an apparently improvement in US-China trade relations.
GBP/NZD Exchange Rate Subdued on Mixed Market Sentiment
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also opens this week’s session trading in a narrow range as investors remain reluctant to make any bullish bets on the ‘Kiwi’ amidst a mixed risk outlook.