Pound (GBP) Flat as Johnson Denies He Lied to the Queen
It was another eventful day in UK politics yesterday as Boris Johnson was forced to deny claims he intentionally mislead the Queen over his proroguing of government.
However, investors appeared to take the development in their stride, with the Pound (GBP) left rangebound as markets focused more on the progress of Brexit talks with the EU.
This is likely to remain the case for today’s session, with GBP investors looking for any signs that the EU may be becoming more receptive to the UK’s proposals for a Brexit deal.
ECB Stimulus Announcement Boosts GBP/EUR Exchange Rate
The Pound Euro (GBP/EUR) exchange rate briefly struck a fresh two-month high on Thursday as the European Central Bank (ECB) unveiled its highly anticipated stimulus package.
The ECB moved to cut its deposit rate to -0.5% and signalled that rates will remain at record lows until inflation picks back up.
ECB President Mario Draghi also announced the bank would be reintroducing its quantitative easing programme to the tune of €20bn a month, as the bank seeks to spur growth in the Eurozone.
Potentially carrying the Euro’s selling bias into today’s session will be the release of the Eurozone’s latest earning’s figures, with economists forecasting wage growth in the bloc will have slowed in the second quarter.
GBP/USD Exchange Rate Subdued on Mixed US Inflation Figures
A mixed outlook on US inflation saw the Pound to US Dollar (GBP/USD) exchange rate trade narrowly yesterday.
Whilst core inflation accelerated to 2.4% in August, the headline CPI reading fell short of expectations, leading to a slump in US bond yields which limited the appeal of the US Dollar.
Coming up this afternoon, the publication of the US retail sales figure could weigh on USD exchange rates if sales growth is shown to have slowed in August.
Brent Crude Retreats below $60, GBP/CAD Exchange Rate Steady
Trade in the Pound to Canadian Dollar (GBP/CAD) exchange rate was stable on Thursday, with the oil-sensitive ‘Loonie’ struggling to find momentum as Brent crude plummeted over 2%, taking it back below $60 a barrel.
GBP/AUD Exchange Rate Steady as Analysts Warn Against too Much Trade Optimism
Following a brief dip on Thursday, the Pound to Australian Dollar (GBP/AUD) exchange rate held mostly steady overnight as analysts warned against too much optimism in regards to the recent thaw in US-China trade hostilities.
GBP/NZD Exchange Rate Stable as Risk Rally Fades
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also remained in a narrow range overnight on Thursday as markets looked at the upcoming US-China trade talks more objectively and the recent risk rally began to fade.