Brexit Fears Continue to Weigh on Pound Sterling (GBP)
The Pound (GBP) remained on the defensive yesterday, striking fresh lows against many of its peers as the rising risks of a no-deal Brexit caused many GBP investors to hit the panic button.
This comes as Boris Johnson strikes an increasingly hard-line stance on Brexit, with the new PM refusing to meet with EU officials unless they are willing to re-open negotiations and drop the Irish backstop.
While Sterling was able to bounce back from its worst levels yesterday as it entered oversold territory, we expect the UK currency to languish at recent levels and remain vulnerable to further losses today.
GBP/EUR Exchange Rate Slumps as German Inflation Impresses
The Pound to Euro (GBP/EUR) exchange rate neared a two-year low on Tuesday as some stronger-than-expected German CPI figures allowed the single currency to keep the pressure on Sterling.
Destatis reported that that German inflation crept higher in July, climbing from 1.6% to 1.7% and beating forecasts it would decelerate to 1.5%.
However, the Euro may be forecast to relinquish some of these gains later this morning as the Eurozone’s latest GDP figures are expected to report that growth slowed to 0.2% in the second quarter.
GBP/USD Exchange Rate Losses Trimmed by Slowing US inflation
The Pound to US Dollar (GBP/USD) exchange rate touched a fresh 28-month low yesterday, before pulling back from its worst levels as markets reacted to the latest US PCE Price Index.
The Federal Reserve’s preferred measure of inflation revealed that price growth the US rose at a slower pace than expected last month, tempering the US Dollar’s recent bullish run.
Looking ahead, the US Dollar is likely to be in the spotlight today as the Fed concludes its July policy meeting. The central bank is widely expected to vote to cut interest rates for the first time in a decade.
GBP/CAD Exchange Rate Slips as Oil Prices Climb
Whilst the Pound to Canadian Dollar (GBP/CAD) exchange rate was able to bounce back from its worst levels on Tuesday, the pairing was left on the back foot as the oil-sensitive ‘Loonie’ was buoyed by rising crude prices.
Coming up today, the release of Canada’s latest GDP figures could weaken CAD exchange rates, as economists forecast growth will have slowed in May.
GBP/AUD Exchange Rate Retreats as Australian Inflation Beats Expectations
The Pound Australian Dollar (GBP/AUD) exchange rate drifted lower again overnight on Tuesday as AUD investors welcomed the publication of Australia’s latest CPI figures as domestic inflation accelerated faster than expected in the second quarter.
GBP/NZD Exchange Rate Rallies from Seven-Month Low on Trump Comments
The Pound to New Zealand Dollar (GBP/NZD) exchange rate rallied from a seven-month low on Tuesday, with the risk-sensitive ‘Kiwi’ sliding from its best levels following a Twitter tirade from Donald Trump, which appeared to pour cold water on hopes of a US-China trade deal.