Pound Sterling (GBP) Softens as EU Refuses to Back Down on Irish Backstop
The Pound (GBP) found itself trending lower at the end of last week as Boris Johnson and the EU remained at loggerheads over the issue of the Irish Border.
Sterling sentiment soured as neither Johnson nor the EU showing any signs that they are likely to back down over the issue, stoking fears that the UK is staring down the barrel of a no-deal Brexit.
Looking to the week ahead, we may see UK politics take a bit of a back seat as the focus turns to the Bank of England (BoE), with a cautious outlook from the bank likely to dent Sterling.
GBP/EUR Exchange Rate Dips after ECB Kicks Rate Cut Down the Road
The Pound to Euro (GBP/EUR) exchange rate edged lower on Friday, with the single currency finding support as markets continued to digest the European Central Bank’s (ECB) latest rate decision.
This saw investors remain reasonably bullish towards the Euro, in spite of the bank signalling that some easing is likely to take place in September.
In focus for EUR investor this week is the publication of the Eurozone’s latest GDP figures, with an expected slowdown in growth in the second quarter likely to put some pressure on the Euro.
GBP/USD Exchange Rate Slides as US GDP Figures Dampen Fed Rate Cut Expectations
The Pound to US Dollar (GBP/USD) exchange rate fell back again on Friday as USD investors welcomed the latest US GDP figures.
With US economic growth slowing less than expected in the second quarter, expectations for Federal Reserve rate cuts were tempered.
While the Fed is still expected to cut rates when it meets later this week, analysts suggest that in light of the continued momentum of the US economy this is not likely to be the start of a new easing cycle.
GBP/CAD Exchange Rate Steady as Oil Prices Stall
The Pound to Canadian Dollar (GBP/CAD) exchange rate traded in a narrow range at the end of last week as a continued lull in domestic data and stalling crude prices left the ‘Loonie’ struggling to find momentum.
GBP/AUD Exchange Rate Buoyed by RBA Rate Cut Speculation
The Pound Australian Dollar (GBP/AUD) exchange rate closed last week’s session just shy of a two-week high as the ‘Aussie’ continued to be pressured by growing expectations that the Reserve Bank of Australia (RBA) will cut rates for a third time later this year.
GBP/NZD Exchange Rate Firms on Dovish RBNZ Expectations
The Pound to New Zealand Dollar (GBP/NZD) exchange rate strengthened on Friday, with ‘Kiwi’ giving ground as the prospect of a rate cut from the Reserve Bank of New Zealand (RBNZ) next month spooked some NZD investors.