Brexit Woes Maintain Pressure on the Pound (GBP)
Brexit jitters kept the Pound (GBP) on the defensive during the European session on Wednesday as Boris Johnson met with German Chancellor Angela Merkel in Berlin.
The talks saw Merkel suggest that a solution to the backstop could be found within 30 days, but this still failed to inspire much confidence in Sterling.
Next up on the docket will be Johnson’s meeting with French President Emmanuel Macron, where the PM can expect a much frostier reception.
Gloomy Eurozone PMIs to Push GBP/EUR Exchange Rate Higher?
The Pound to Euro (GBP/EUR) exchange rate trended lower yesterday, with EUR investors appearing to shrug off the unfolding political drama in Italy until it becomes clearer how President Sergio Mattarella will proceed.
However, the Euro could face headwinds today with the release of the Eurozone’s latest PMI figures.
These are expected to show that growth in the bloc’s private sector drifted closer to stagnation this month, likely increasingly expectations for significant monetary stimulus from the European Central Bank (ECB) in September.
FOMC Minutes Weaken GBP/USD Exchange Rate
The Pound to US Dollar (GBP/USD) exchange rate drifted lower on Wednesday in response to the Federal Open Market Committee meeting minutes.
While most of what was revealed had already been priced in by markets, the ‘Greenback’ firmed slightly as most members saw the recent cut as a ‘mid-cycle adjustment’ and not the start of a new easing cycle.
The Fed will remain in focus through the second half of the session as the bank holds its annual Jackson Hole Symposium, with markets looking to a speech by Fed Chair Jerome Powell for more insight into the bank’s policy outlook.
GBP/CAD Exchange Rate Plummets on Robust Canadian CPI
An impressive domestic CPI print prompted the Canadian Dollar (CAD) to surge against the Pound (GBP) yesterday. The robust inflation reading was seen as lowering the odds of the Bank of Canada (BoC) easing monetary policy in the near-term.
GBP/AUD Exchange Rate Rallies as Australian PMIs Disappoint
The Pound to Australian Dollar (GBP/AUD) exchange rate bounced back overnight on Wednesday, with the pairing climbing almost half a cent in the wake of Australia’s latest PMI figures.
These revealed growth in the country’s service sector unexpectedly contracted this month, dampening appetite for the ‘Aussie’ as it puts more pressure on the Reserve Bank of Australia (RBA) to continue cutting rates.
GBP/NZD Exchange Rate Rebounds amid CNY Sell-Off
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also rallied overnight, with investors shying away from NZD in reaction to another sell-off of the Chinese Yuan (CNY).
Coming up later tonight, the publication of New Zealand’s latest retail sales figures could push the ‘Kiwi’ lower if sales growth slowed in line with expectations in the second quarter.
Data Releases
09:00 EUR Manufacturing PMI (Aug)
09:00 EUR Services PMI (Aug)
11:00 GBP CBI Distributive Trades (Aug)
12:30 EUR ECB Minutes
15:00 EUR Consumer Confidence (Aug)
15:00 USD Jackson Hole Symposium
23:45 NZD Retail Sales (Q2)