Pound Weakens as Boris Johnson’s ‘Final’ Brexit Offer Receives Lukewarm Response from the EU

Pound (GBP) Muted as Brexit Proposals Fail to Impress

The Pound (GBP) struggled to find its feet mid-week as Boris Johnson presented his ‘final’ Brexit offer to the EU.

Addressing the Conservative party conference, Johnson said the only alternative to his proposals would be no-deal, a worrying prospect given the response from Brussels appeared largely negative.

Looking ahead, the UK’s services PMI may be in the spotlight today. After both the manufacturing and construction PMI’s underperformed, stagnation in the service sector would point to a contraction in economic growth in September, likely weakening Sterling.

GBP/EUR Exchange Rate Subdued after Cuts to German Growth Forecast

The Pound Euro (GBP/EUR) exchange rate was rangebound on Wednesday after economic institutes in Germany slashed their growth forecasts for the country.

The institutes predict Europe’s largest economy will now only grow at 0.5% in 2019 and 1.1% in 2020, revising earlier estimates of 0.8% and 1.8%.

Coming up this morning, the publication of the Eurozone’s latest retail sales figures may drag on the Euro if sales growth was weak in August.

GBP/USD Exchange Rate Flat as US Jobs Report Disappoints

The Pound to US Dollar (GBP/USD) exchange rate held in narrow range on Wednesday, with the pairing bouncing back from its initial losses after the US ADP employment figures printed below expectations.

The report showed the US economy only added 135,000 jobs in September, while August’s figures were revised down from 195,000 to 157,000.

The ADP report is often viewed as an early indicator of the more influential non-farm payroll figures, which could put more pressure on the US Dollar when they are published later in the week.

In the meantime USD investors are likely to focus on the release of the ISM non-manufacturing PMI later this afternoon, with the ‘Greenback’ potentially facing some headwinds if growth in the US services sector slowed last month.

GBP/CAD Exchange Rate Accelerates as Oil Prices Slump

The Pound to Canadian Dollar (GBP/CAD) exchange rate ticked higher on Wednesday, climbing around half a cent through the European session as the oil-sensitive ‘Loonie’ was knocked when Brent crude fell back to $58 a barrel.

GBP/AUD Exchange Rate Retreats Following Robust Australian Trade Figures

The Pound to Australian Dollar (GBP/AUD) exchange rate fell back from a one-week high overnight on Wednesday, with the ‘Aussie’ recouping some of its recent losses after Australia posted its fourth highest trade surplus on record in August.

GBP/NZD Exchange Rate Slips as Risk Sentiment Improves

The Pound to New Zealand Dollar (GBP/NZD) exchange rate slid by around half a cent yesterday evening before stalling overnight as a modest improvement in market risk appetite helped to buoy the ‘Kiwi’.


Matthew Andrews

Contact Matthew Andrews