Pound (GBP) Subdued as Brexit Uncertainties Grow
The Pound (GBP) was mostly muted at the start of this week’s session as Brexit uncertainties continued to weigh on sentiment.
This was in part driven by French President Emmanuel Macron’s ultimatum to Boris Johnson, telling the UK PM he has until the ‘end of the week’ to present a deal which ‘respects’ EU principles.
As a result Brexit negotiations are expected to intensify in the coming days, but with analysts suggesting the odds of a deal are ‘slim to none’ any upside in Sterling is likely to remain limited.
GBP/EUR Exchange Rate Steady as German Factory Orders Disappoint
The Pound Euro (GBP/EUR) exchange rate traded in a narrow range on Monday, with the release of Germany’s factory order figures limiting the appeal of the single currency.
Factory orders slumped another 0.6% in August, an improvement on the 2.1% contraction recorded in July, but reigniting concerns that Europe’s largest economy is headed towards a recession.
However, potentially offering a small ray of hope are Germany’s latest industrial production figures. This morning’s data showed output unexpectedly rebounded in August.
GBP/USD Exchange Rate Mixed Ahead of US-China Trade Talks
The Pound to US Dollar (GBP/USD) exchange rate traded in a wide range yesterday as investors focused on high-level US-China trade talks taking place at the end of the week.
USD investors were initially wary given that reports suggest the Chinese delegation will present an offer of only limited scope, something which could anger their US counterparts.
However this sentiment shifted later in the session after President Donald Trump struck a very optimistic tone, stating: ‘we think there’s a chance we could do something very substantial’.
Coming up today, the latest US PPI figures could put some pressure on the US dollar if we see producer prices remain muted in September.
GBP/CAD Exchange Rate Slides as Oil Prices Accelerate
The Pound to Canadian Dollar (GBP/CAD) exchange rate ticked lower on Monday as the oil-sensitive ‘Loonie’ was given a leg up after Brent crude climbed back above $59 a barrel.
GBP/AUD Exchange Rate Slumps on Trade Deal Hopes
The Pound to Australian Dollar (GBP/AUD) exchange rate fell roughly half a cent in overnight trade on Monday. Renewed hopes of a US-China trade deal saw a strong recovery in risk appetite, which greatly benefited the risk-sensitive ‘Aussie’.
GBP/NZD Exchange Rate Slides as Markets Go Risk-On
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also tumbled overnight as the ‘Kiwi’ was swept up in the demand for risk-sensitive currencies.