Pound (GBP) Muted as Brexit Uncertainty Persists
The Pound (GBP) remained on the defensive during yesterday’s session, with negative Brexit sentiment casting a long shadow over the currency.
With Brexit talks between the UK and EU now all but dead, the focus turns to whether or not Boris Johnson will be able to push through a no-deal Brexit, or whether the deadline could be pushed back again.
While the laws compelling Johnson to seek a Brexit extension are thought to be robust, GBP investors remain wary amidst speculation the PM will seek to circumvent them.
The UK’s latest monthly GDP print is expected to show that domestic growth stagnated in August, likely heaping even more pressure on GBP exchange rates throughout Thursday.
GBP/EUR Exchange Rate Subdued despite ECB Comments
The Pound Euro (GBP/EUR) exchange rate was left trading close to a one-month low on Wednesday in spite of some dovish ECB comments.
European Central Bank (ECB) Vice President Luis De Guindos suggested that the bank still had some headroom to act, hinting that interest rates could fall further.
EUR investors will be focused on the publication of the minutes from the ECB’s September policy meeting today. The minutes should shed more light on the bank’s reasoning for easing policy last month.
GBP/USD Exchange Rate Flat as US-China Trade Talks Loom
The Pound to US Dollar (GBP/USD) exchange rate was range bound through the European session as uncertainty over US-China trade talks left the ‘Greenback’ trading sideways.
The publication of minutes from the Federal Reserve’s most recent policy meeting also limited USD movement after they revealed policymakers remain split on whether to continue cutting rates.
All eyes will be on Washington today as the US-China trade talks finally get under way.
This is likely to overshadow the latest US CPI release, which otherwise may have provided a modest boost to the US Dollar if inflation rose in line with expectations.
GBP/CAD Exchange Rate Holds Ground, Election Worries Beginning to Show?
The Pound to Canadian Dollar (GBP/CAD) exchange rate was mostly flat on Wednesday in spite of oil prices jumping back above $59. This suggests that uncertainty regarding Canada’s upcoming election has started to take its toll on the ‘Loonie’.
GBP/AUD Exchange Rate Retreats on US-China Trade Hopes
The Pound to Australian Dollar (GBP/AUD) exchange rate made some tentative gains on Wednesday. However the ‘Aussie’ recouped its losses overnight as market risk appetite was lifted by US-China trade optimism.
GBP/NZD Exchange Rate Undermined by Rising Risk Sentiment
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also fell back overnight on Wednesday as risk-on sentiment helped bolster demand for the ‘Kiwi’.