Pound (GBP) Rocked by Brexit Headlines
The Pound (GBP) traded in a wide range yesterday as the UK and EU finally achieved consensus on a Brexit deal.
While the news initially buoyed Sterling, gains were quickly lost as news emerged that the Democratic Unionist Party (DUP) refused to endorse the deal.
Without the support of the DUP, Prime Minister Boris Johnson faces a significant challenge achieving a majority in Saturday’s parliamentary vote.
As a result the Pound is likely to remain pressured going in the weekend.
GBP/EUR Exchange Rate Muted as Brexit Deal Faces Hurdles
The Pound Euro (GBP/EUR) exchange rate closed the session well below its best levels on Thursday after the DUP rejected a UK-EU Brexit deal.
Movement in the Euro was also driven largely by Brexit sentiment, with the shared currency fluctuating throughout the session.
In the absence of any Eurozone data, EUR investors are likely to remain focused on Brexit today, with limited movement expected as markets perceive low odds that the current deal might achieve a parliamentary majority.
GBP/USD Exchange Rate Buoyed Following Lacklustre US Data
The Pound to US Dollar (GBP/USD) exchange rate maintained an upward momentum yesterday amidst broad weakness in the ‘Greenback’.
This came as US industrial production printed below expectations last month, with a 0.4% contraction in factory output heightening concerns for the US economy.
A number of Federal Reserve policymakers will make an address later this afternoon, potentially heaping more pressure on the US dollar if they echo the same economic concerns.
GBP/CAD Exchange Rate Muted on Falling Oil Prices
The Pound to Canadian Dollar (GBP/CAD) exchange rate languished in a narrow range on Thursday, with the oil-sensitive ‘Loonie’ struggling to find a foothold while crude prices continue to sink.
GBP/AUD Exchange Rate Steady Following Lowe Speech
The Pound to Australian Dollar (GBP/AUD) exchange rate remained mostly rangebound overnight on Thursday following a speech from Reserve Bank of Australia (RBA) Governor, Philip Lowe in which he said another negative interest rate was ‘extraordinarily unlikely’.
GBP/NZD Exchange Rate Flat as Chinese Growth Disappoints
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also steadied overnight, with the ‘Kiwi’ unable to press its advantage over Sterling after China reported its worst quarter of growth in nearly 30 years.