Pound Sterling (GBP) Stabilises as Johnson Wins the Conservative Party Leadership Contest
Trade in the Pound (GBP) was mostly flat on Tuesday as markets reacted to the announcement that Boris Johnson had won the Conservative leadership election.
This saw Sterling stabilise as it brought an end to weeks of political speculation over who would replace Theresa May as UK Prime Minister.
However this may simply be the calm before the storm as GBP investors refrain from making any bets ahead of the announcement of Johnson’s new cabinet when he assumes office later today.
GBP/EUR Exchange Rate Climbs as ECB Meeting Looms
The Pound to Euro (GBP/EUR) exchange rate trended higher yesterday as investors remained wary of the single currency ahead of what is expected to be a dovish rate decision by the European Central Bank on Thursday.
However, helping to temper the losses in EUR exchange rates was the publication of the Eurozone’s latest consumer confidence index as it revealed consumers grew slightly less gloomy this month.
Looking ahead we have the publication of the Eurozone’s latest PMI figures later this morning, which could see the Euro move lower if growth in the bloc’s private sector slowed this month as forecast.
GBP/USD Exchange Rate Slips on Budget Deal Relief
The Pound to US Dollar (GBP/USD) exchange rate edged lower on Tuesday, as the ‘Greenback’ was buoyed by Donald Trump’s announcement that a bipartisan budget deal has been agreed.
This helped to offset a larger than expected fall in existing US home sales last month as it is hoped the deal will allow the US to avoid a fiscal crisis until 2021 after the US debt ceiling was raised.
Whilst there is a lull in notable US economic data today, we may still see the US Dollar accelerate due to the potential weakness of some of its peers.
GBP/CAD Exchange Rate Steady as Oil Prices Stall
The Pound to Canadian Dollar (GBP/CAD) exchange rate closed yesterday’s session almost unchanged from its opening rate as the oil-sensitive ‘Loonie’ struggled to find momentum after crude prices stalled at $63 a barrel.
GBP/AUD Exchange Rate Climbs on RBA Rate Cut Expectations
The Pound Australian Dollar (GBP/AUD) exchange rate struck a one-week high overnight on Tuesday, with the ‘Aussie’ giving up ground following speculation that the Reserve Bank of Australia’s (RBA) next rate cut could come in October, rather than November as previously thought.
GBP/NZD Exchange Rate Gains Tempered by Robust NZ Trade Figures
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also accelerated last night, although only modestly as the ‘Kiwi’ was able to offer some resistance as New Zealand reported that its trade surplus unexpectedly swelled in June.
Data Releases
09:00 EUR Manufacturing PMI (Jul)
09:00 EUR Services PMI (Jul)
09:30 GBP Mortgage Approvals (Jun)
16:00 GBP Boris Johnson Addresses Nation as UK PM