Pound (GBP) Stalls Despite Latest Setback for UK Government
News that a Scottish court had ruled Boris Johnson’s proroguing of parliament as unlawful dominated news headlines yesterday, but this failed to trigger any gains for the Pound (GBP).
Instead Sterling found itself ceding some of its recent gains as Brexit doubts lingered and markets speculated on the potential outcome of an almost inevitable election.
GBP investors are likely to remain focused on the news today, with the potential for fresh fluctuations in the currency depending on political developments.
ECB Policy Decision to Dominate GBP/EUR Exchange Rate
The Pound Euro (GBP/EUR) exchange rate drifted higher yesterday, with investors steering clear of the single currency ahead of a highly anticipated stimulus announcement from the European Central Bank (ECB) later this afternoon.
Much has been made over the ECB’s ‘substantial’ stimulus package in recent weeks, with EUR investors hopeful it could help to shore up the Eurozone’s frail economic growth.
However, some economists have expressed doubts that ECB President Mario Draghi will be able to deliver on market expectations, so the Euro could be set for volatility.
Rebound in US Bond Yields Drag on GBP/USD Exchange Rate
The bulls were back in control of the US Dollar (USD) yesterday, with the ‘Greenback’ enjoying broad support thanks to a persistent recovery in US bond yields, which helped ease concerns of a US recession.
Also feeding into the demand for USD was the publication of a stronger-than-expected domestic PPI reading in August, with producer prices accelerating by 0.1% against forecasts they would stagnate.
This may hint at US CPI figures coming in above expectations, with a solid headline inflation reading potentially extending the US Dollar’s gains later this afternoon.
GBP/CAD Exchange Rate Subdued as Oil Prices Accelerate
The Pound to Canadian Dollar (GBP/CAD) exchange rate was left rangebound mid-week, with the oil-sensitive ‘Loonie’ holding its ground as Brent crude held above $63 a barrel.
Trump’s Tariff Delay Dents GBP/AUD Exchange Rate
Trade optimism saw the Pound to Australian Dollar (GBP/AUD) exchange rate slide by over a cent overnight on Wednesday, with markets welcoming tweets from US President Donald Trump announcing that plans to hike tariffs against China would be delayed.
GBP/NZD Exchange Rate Stumbles as Risk-On Mood Prevails
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also slumped overnight, with the risk-sensitive ‘Kiwi’ accelerating in response to the renewed optimism over US-China trade talks.