Pound (GBP) Pressured by Fresh Brexit Uncertainty
Brexit jitters weighed on the Pound (GBP) on Monday, with sentiment weakening as Boris Johnson reaffirmed his position that the EU would need to compromise for a Brexit deal to happen.
The focus on Brexit saw GBP investors shrug off comments made by Bank of England (BoE) Governor Mark Carney, in which he suggested the BoE was still some way off discussing negative interest rates.
Expect UK politics to remain the main driving force behind the Pound today, as Labour leader Jeremy Corbyn continues to build support for a no-confidence vote in Johnson.
Gloomy Eurozone Inflation Print Fails to Boost GBP/EUR Exchange Rate
The Pound to Euro (GBP/EUR) exchange rate traded lower at the start of this week’s session, with the single currency remaining resilient in spite of a gloomy Eurozone CPI reading.
The Eurozone’s final inflation reading was revised down from 1.1% to 1% in July. This was the weakest reading since November 2016 and further bolsters the case for the European Central Bank to introduce fresh stimulus next month.
However, EUR could weaken today as Italy’s political turmoil remains a major concern for markets amid the threat of fresh elections and fears the country could lurch to the right.
GBP/USD Exchange Rate Subdued as Trump Plays Down US Recession Fears
The Pound to US Dollar (GBP/USD) exchange rate opened this week on the back foot, sliding around 0.3% on Monday after President Donald Trump sought to calm fears of a US recession.
Trump spoke to investors on Sunday claiming the US economy is doing ‘tremendously well’ whilst praising his tax cuts, which he said were helping to put more money in the pockets of consumers.
In the absence of any economic data today, USD investors are likely to focus on the upcoming Jackson Hole symposium as they speculate on whether or not the Federal Reserve will signal plans to cut rates again next month.
Rallying Oil Prices Soften GBP/CAD Exchange Rate
The Pound to Canadian Dollar (GBP/CAD) exchange rate fell by roughly half a cent yesterday as the continued rally in crude prices helped propel the oil-sensitive ‘Loonie’ higher.
GBP/AUD Exchange Rate Plummets on RBA Minutes
The Pound to Australian Dollar (GBP/AUD) exchange rate plunged overnight as markets reacted to the minutes from the Reserve Bank of Australia’s (RBA) latest policy meeting.
While the minutes confirmed the RBA’s easing bias, they offered no dovish surprises, with the ‘Aussie’ rising as a September rate cut looks unlikely.
GBP/NZD Exchange Rate Dips amid Risk-On Mood
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also edged lower last night, with the ‘Kiwi’ accelerating thanks to an improvement in risk appetite.
The New Zealand Dollar faces some potential headwinds this afternoon however, should dairy prices continue to weaken at today’s dairy auction.