Pound Sterling (GBP) Dented by Brexit Warning
The Pound (GBP) fell during yesterday’s trading session as persistent Brexit uncertainty continued to cast a shadow over the currency.
The latest slump came as Boris Johnson’s most senior adviser, Dominic Cummings, warned MPs that a vote of no-confidence in the PM would not stop him from pursuing a no-deal Brexit.
In the absence of any notable UK economic data today, we expect Brexit to remain the main catalyst of Sterling movement, keeping the pressure on GBP exchange rates.
GBP/EUR Exchange Rate Slides despite Worrying German Data
The Pound to Euro (GBP/EUR) exchange rate softened on Wednesday, in spite of some gloomy Germany industrial data.
Destatis reported German industrial production fell sharply in June, spooking EUR investors who fear this bodes poorly for domestic growth in the second quarter.
Coming up today we may see the European Central Bank’s (ECB) economic bulletin put some pressure on the single currency as it likely reinforces the ECB’s dovish outlook for the remainder of 2019.
GBP/USD Exchange Rate Losses Capped by Fed Rate Cut Speculation
The Pound to US Dollar (GBP/USD) exchange rate trended lower during yesterday’s session but was prevented from registering any major losses on the back of rising expectations of an aggressive rate cut from the Federal Reserve next month.
According to CME Group’s FedWatch tool, the odds that the Fed will cut rates by 50 basis points in September leapt from 15% to 35% on Wednesday as a result of rising US-China trade tensions.
Expect to see this rate cut speculation continue to influence USD exchange rates today amidst a continued lull in US economic data.
GBP/CAD Exchange Rate Steady as Oil Slump Continues
The Pound to Canadian Dollar (GBP/CAD) exchange rate was able to hold fairly steady on Wednesday as the weakness in Sterling was counteracted by another slump in crude prices which limited demand for the oil-sensitive ‘Loonie’.
GBP/AUD Exchange Rate Stabilises on Trade Optimism
The Pound Australian Dollar (GBP/AUD) exchange rate briefly roared higher on Wednesday, before closing the day’s session close to where it began as the ‘Aussie’ reversed its losses amid optimism for US-China trade talks in September.
Looking ahead we may see the ‘Aussie’ come under pressure later tonight if the Reserve Bank of Australia (RBA) strikes an overly dovish tone in its latest monetary policy statement.
GBP/NZD Exchange Rate Clings to Gains on Talk of Negative Interest Rates
The Pound to New Zealand Dollar (GBP/NZD) exchange rate rocketed up by over 2% yesterday before relinquishing some ground through the European session.
However the ‘Kiwi’ was still left notably lower as its attempts to recover were scuppered by Adrian Orr. The Reserve Bank of New Zealand (RBNZ) Governor reiterated his comments on the possibility of negative interest rates.