UK Political Uncertainty Keeps the Pound (GBP) Under Pressure
Political turmoil in the UK limited the appeal of Sterling yesterday as markets contemplate the near-term fallout of government moves to prorogue parliament.
Opposition MPs could now be forced to pursue a vote of no-confidence in Prime Minister Boris Johnson as they attempt to block a no-deal Brexit. This, in turn, could trigger a general election and will almost certainly increase political uncertainty.
Expect to see Brexit remain in focus and overshadow the UK’s latest mortgage approval figures.
German Inflation Tumbles, GBP/EUR Exchange Rate Stable
A larger-than-expected drop in German inflation saw the Pound Euro (GBP/EUR) exchange rate stabilise on Thursday.
German inflation slowed from 1.7% to 1.4% in August, stoking speculation for an injection of further monetary stimulus from the European Central Bank (ECB).
This morning’s Eurozone CPI figures may apply pressure to EUR exchange rates, with August inflation forecast to hold steady at a two-year low.
GBP/USD Exchange Rate Muted as US GDP Revised Lower
The Pound to US Dollar (GBP/USD) exchange rate spent much of yesterday’s session rangebound as updated GDP figures saw US economic growth revised lower in the second quarter.
The Bureau of Economic Analysis confirmed rising GDP at an annual rate of 2% for the second quarter, down from a preliminary estimate of 2.1%.
Coming up later this afternoon, the latest US PCE Price Index could lift the US Dollar if July’s Federal Reserve preferred inflation indicator accelerated as forecast.
GBP/CAD Exchange Rate Poised to Fall if Canadian GDP Accelerates
The Pound to Canadian Dollar (GBP/CAD) exchange rate was left subdued on Thursday, the ‘Loonie’ enjoying modest support as Canada’s Q2 current account deficit narrowed at a faster pace than expected.
Canada’s GDP figures are forecast to show accelerated economic growth in the second quarter, potentially extending upward momentum in CAD exchange rates this afternoon.
GBP/AUD Exchange Rate Rallies on Disappointing Australian Data
The Pound to Australian Dollar (GBP/AUD) exchange rate rose around half a cent overnight on Thursday, retracing losses from the previous session after July’s Australian building permits came in well below expectations.
Gloomy NZ Business Confidence Continues to Influence GBP/NZD Exchange Rate
A sharp drop in New Zealand’s latest business confidence index continued to influence the Pound to New Zealand Dollar (GBP/NZD) exchange rate last night; the pairing rallied over a cent from its worst levels.