Pound Sterling (GBP) Surges In Spite of Johnson’s Cabinet Reshuffle
The Pound (GBP) was the strongest performer in currency markets yesterday, with Sterling accelerating as Boris Johnson was formally appointed UK Prime Minister.
Most surprising was the Pound’s ability to hold on to these gains in spite of a major culling of the cabinet and the appointment of a swathe of Brexiteers.
Outside of the political headlines that will continue to dominate sentiment today we could see the Confederation of British Industry’s (CBI) latest distributive trends index also influence GBP exchange rates, especially if it shows retail activity remained weak this month.
GBP/EUR Exchange Rate Surges as Gloomy PMIs Stoke German Recession Fears
The Pound to Euro (GBP/EUR) exchange rate rocketed higher during the European session yesterday, with the pairing striking a new four-week high on the back of some abysmal Eurozone PMI Figures.
Of particular worry for EUR investors were the German manufacturing figures as they revealed the country’s factory sector suffered its sharpest contraction in seven years, stoking fears that the Eurozone’s largest economy may be headed towards a recession.
Centre stage today will be the European Central Bank’s (ECB) latest policy decision, with markets bracing for some notable movement in response to what is widely forecast to be an extremely dovish tone from policymakers.
GBP/USD Exchange Rate Accelerates as Risk Sentiment Improves
The Pound to US Dollar (GBP/USD) exchange rate achieved its best levels of the week on Wednesday as the pairing accelerated over half a cent.
This came on the back of broad weakness in the US Dollar, with the currency pulling away from its recent highs as US-China trade optimism prompted a modest improvement in market risk appetite.
Potentially revitalising the US Dollar later this afternoon will be the publication of the latest US durable goods figures, with economists forecasting that goods orders will have rebounded in June.
GBP/CAD Exchange Rate Climbs, Oil Prices Flat
The Pound to Canadian Dollar (GBP/CAD) exchange rate struck a fresh three-week yesterday, with the oil-sensitive ‘Loonie’ struggling to hold its ground against Sterling as crude prices stalled at $63 a barrel, despite escalating tensions in the Middle East.
GBP/AUD Exchange Rate Consolidates Gains on Dovish RBA Chatter
The Pound Australian Dollar (GBP/AUD) exchange rate held at a one-week high overnight on Wednesday, with the ‘Aussie’ unable to recoup any of its losses during yesterday’s European session following some dovish comments from Reserve Bank of Australia (RBA) Governor Philip Lowe.
GBP/NZD Exchange Rate Steady as Risk Appetite Improves
The Pound to New Zealand Dollar (GBP/NZD) exchange rate was also steady overnight on Wednesday, with the pairing holding just below the week’s best levels as the ‘Kiwi’ was supported by a modest improvement in risk sentiment.