Pound (GBP) Sinks, EU Unimpressed by Johnson’s Brexit Offer
The Pound (GBP) ticked lower at the end of last week’s session after the European Parliament President David-Maria Sassoli formally rejected Boris Johnson’s Brexit proposal.
At the same time, Sterling failed to find support from reports suggesting that Johnson will obey a law compelling him to seek another Brexit extension from the EU. The PM had previously claimed he would rather ‘die in a ditch’ than ask for another delay.
Looking ahead, we expect Brexit headlines to continue dominating GBP exchange rates in the coming week and injecting volatility into the Pound.
GBP/EUR Exchange Rate Slips Despite US-EU Trade Worries
The Pound Euro (GBP/EUR) exchange rate fell back on Friday, falling close to a one-week low as markets were spooked by the latest Brexit headlines.
The single currency was left muted in wider trade however as markets expressed concern for how a burgeoning trade dispute between the US and EU could impact the Eurozone’s already fragile economy.
Meanwhile, the Euro may face some headwinds at the start of this week’s session after data released earlier this morning revealed German factory orders contracted again in August.
GBP/USD Exchange Rate Slumps on Mixed US Jobs Report
The Pound to US Dollar (GBP/USD) exchange rate trended lower at the end of last week’s session after the latest US job’s data reported the domestic unemployment rate fell to just 3.5%, its lowest level in 50 years.
However, the ‘Greenback’ was only able to make modest gains as accompanying data showed a weaker than expect rise in payrolls and stagnation in wage growth.
In the spotlight today we have a speech from Federal Reserve Chair Jerome Powell, with USD investors watching closely for any signs that the recent run of gloomy US data could push the Fed to cut rates again this month.
GBP/CAD Exchange Rate Slumps as Oil Prices Rally
The Pound to Canadian Dollar (GBP/CAD) exchange rate fell roughly half a cent on Friday, with the ‘Loonie’ bolstered by a uptick in oil prices as well as data revealing Canada’s trade deficit narrowed more than expected in August.
GBP/AUD Exchange Rate Slumps on US-China Trade Optimism
The Pound to Australian Dollar (GBP/AUD) exchange rate sank to a two-week low at the end of last week, with the ‘Aussie’ accelerating amidst rising optimism for US-China trade talks.
The upbeat sentiment came in response to comments from White House economic adviser Larry Kudlow, who suggested there has been a ‘softening in the psychology’ of talks.
GBP/NZD Exchange Rate Retreats as Risk Appetite Improves
The Pound to New Zealand Dollar (GBP/NZD) exchange rate was also undermined by the prospect of positive progress in US-China trade talks on Friday, with NZD investors hoping an easing of trade tensions may help lift some of the pressure on the Reserve Bank of New Zealand (RBNZ) to continue lowering rates.