Brexit Optimism Lifts Pound (GBP) Exchange Rates
The Pound (GBP) proved to be the strongest performer at the end of last week’s session as Brexit optimism helped to carry Sterling’s upward momentum through Friday’s session.
According to reports, optimism regarding Jeremy Corbyn’s plan to call a no-confidence vote in Boris Johnson gathered steam last week as more MPs came out in support.
In the absence of any notable economic data, UK political developments will act as the main catalyst of GBP movement this week.
ECB Stimulus Expectations Boost the GBP/EUR Exchange Rate
The Pound to Euro (GBP/EUR) exchange rate leapt on Friday as the common currency was driven lower.
This came in response to comments by the European Central Bank’s (ECB) Ollie Rehn on Thursday and the subsequent speculation on how substantial the ECB’s next round of stimulus will be.
Expect the Euro to remain tilted to the downside this week as investors brace for another gloomy PMI print from the Eurozone.
GBP/USD Exchange Rate Jumps as US Consumer Sentiment Slumps to 7-Month Low
The Pound to US Dollar (GBP/USD) exchange rate climbed over half a cent at the end of last week’s session, with a sharp drop in US consumer sentiment undermining USD.
The University of Michigan reported its sentiment index fell to just 92.1 in August, its lowest reading since January. Trade war concerns and signs of slowing domestic growth appeared to be the main catalysts for the drop.
Looking ahead, the US Dollar could stumble this week if the Federal Reserve hints at future rate cuts at its annual Jackson Hole Symposium.
Recovery in Crude Prices Fails to Undermine GBP/CAD Exchange Rate
The Pound to Canadian Dollar (GBP/CAD) exchange rate struck a fresh one-week high on Friday. While the oil-sensitive ‘Loonie’ was able to hold its ground in broader trade thanks to a rebound in Brent crude, it proved insufficient to hold off Sterling.
GBP/AUD Exchange Rate Soars amid Trade Uncertainty
The Pound to Australian Dollar (GBP/AUD) exchange rate rocketed higher at the end of last week, with the pairing climbing over a cent as persistent trade uncertainty limited AUD appeal.
The minutes from the Reserve Bank of Australia’s (RBA) latest policy meeting could weaken the ‘Aussie’ overnight if they indicate that the central bank is considering further rate cuts.
Weak Risk Appetite Strengthens the GBP/NZD Exchange Rate
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also raced higher on Friday, with the ‘Kiwi’ struggling to find support as a risk-off mood enveloped markets.