Pound Sterling (GBP) Exchange Rate Suffers amid Election Uncertainty
The Pound (GBP) fell on Thursday, weighed down by election uncertainty as Boris Johnson announced he would seek to hold a snap election before Christmas.
Analysts fear a general election could prove inconclusive for Brexit, resulting in some Sterling selling yesterday.
EU leaders are expected to deliver their verdict on a Brexit extension later today, and GBP investors will be eager to know how long the delay will be.
An expected three-month delay could put some pressure on the Pound if markets fear this will only prolong the uncertainty surrounding Brexit.
GBP/EUR Exchange Rate Slips as Draghi Takes a Bow
The Pound Euro (GBP/EUR) exchange rate trended lower on Thursday as the European Central Bank (ECB) left rates on hold following its October policy meeting.
The bank warned of downside risks facing the Eurozone and suggested rates are likely to remain at a record low for some time.
However EUR investors took the ECB’s dovish outlook in their stride, instead focusing on the legacy left by outgoing President Mario Draghi.
Looking ahead, the Euro may face some pressure this morning with the publication of another gloomy business confidence survey from Germany.
GBP/USD Exchange Rate Losses Capped by Disappointing US Durable Goods Orders
The Pound to US Dollar (GBP/USD) exchange rate closed the European session on the back foot yesterday, but was prevented from suffering any significant losses in the wake of some gloomy US durable goods figures.
A larger-than-expected contraction in goods orders last month reaffirmed concerns over the slowdown of the US manufacturing sector and stoked expectations the Federal Reserve will cut interest rates again next week.
In the absence of any domestic data, firming Fed rate cut expectations will continue to limit the upside potential of the US Dollar today.
GBP/CAD Exchange Rate Slips as Oil Strikes $61
The Pound to Canadian Dollar (GBP/CAD) exchange rate edged lower on Thursday, with the oil-sensitive ‘Loonie’ finding support as Brent crude climbed above $61 a barrel.
GBP/AUD Exchange Rate Steady as Pence Criticises China
The Pound to Australian Dollar (GBP/AUD) exchange rate traded in a narrow range overnight on Thursday, following a speech by US Vice-President Mike Pence on China.
AUD investors feared cracks in US-China trade talks may be beginning to show as Pence lashed out at American firms for ‘kowtowing’ to Beijing and warned that Chinese policy was growing ‘more aggressive and destabilising’.
GBP/NZD Exchange Rate Stable as Risk Sentiment Weakens
The Pound to New Zealand Dollar (GBP/NZD) exchange rate also traded in a narrow range overnight as the appeal of the ‘Kiwi’ was dented by tensions between the US and China.