Pound (GBP) Slumps Following Brexit Vote
The Pound (GBP) plummeted on Tuesday after MPs voted to reject Boris Johnson’s attempt to fast-track his Withdrawal Agreement Bill through parliament by the end of the week.
In response Johnson told MPs the legislation is now ‘paused’ while he speaks to EU leaders about the next course of action.
EU Council President Donald Tusk has said that he recommends EU leaders grant another extension, alleviating the immediate threat of a no-deal Brexit and potentially helping to limit any further downside in Sterling.
However, the PM has said he will push for a general election if a delay is granted, the uncertainty of which could inject some fresh volatility into GBP exchange rates.
GBP/EUR Exchange Rate Mixed on Brexit Fears
The Pound Euro (GBP/EUR) exchange rate fluctuated during the European session yesterday as Brexit concerns weighed on both currencies.
The single currency was also left on the back foot in wider trade amid fears the hard-won Brexit deal could still unravel due to opposition within UK parliament.
On the docket today is the latest Eurozone consumer confidence survey, with the Euro poised to soften if household sentiment continued to deteriorate this month.
GBP/USD Exchange Rate Falters
The Pound to US Dollar (GBP/USD) exchange rate moved away from its recent highs on Tuesday as the pairing was pressured by a pick-up in demand for the ‘Greenback’.
This came as Brexit headlines dominated currency markets, weighing on global risk appetite and buoying demand for safe-haven currencies such as the US Dollar.
In the absence of any economic data, any movement in USD exchange rates is likely to remain dependent on market risk sentiment as well as Federal Reserve rate cut speculation.
GBP/CAD Exchange Rate Losses Trimmed by Shock Contraction in Canadian Retail Sales
The Pound to Canadian Dollar (GBP/CAD) exchange rate was able to minimise its losses during the European session yesterday in response to Canada’s latest retail sales figures.
Statistics Canada reported sales growth slumped 0.1% in August, disappointing CAD investors who had forecast sales growth would have remained steady at 0.4%.
GBP/AUD Exchange Rate Steadies amid Fading Trade Optimism
After slumping on Tuesday evening, the Pound to Australian Dollar (GBP/AUD) exchange rate was able to stave off further losses overnight as market risk appetite began to weaken.
This came following comments from US Commerce Secretary Wilber Ross downplaying the chances of the US-China ‘phase 1’ trade deal being signed next month.
GBP/NZD Exchange Rate Bottoms Out on Weak NZ Trade Figures
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also steadied overnight, with the ‘Kiwi’ unable to press its advantage after the domestic trade deficit narrowed less-than-expected in September.