Pound (GBP) Undermined by Gloomy PMIs
The Pound (GBP) traded sideways at the start of this week’s session as some initial gains driven by renewed Brexit optimism were wiped out by disappointing PMI figures.
The PMI figures stoked concerns that the UK economy may be at risk of contraction in the fourth quarter as growth in the private sector slumped to its lowest levels since July 2016.
Sterling sentiment then took another hit overnight on the back of reports that Boris Johnson could create a 2020 cliff-edge exit by passing a bill legally blocking an extension to the Brexit transition period.
In the spotlight today we have the publication of the UK’s latest employment report. Could a slump in wage growth exert some pressure on Sterling this morning?
GBP/EUR Exchange Rate Flat on Worrying Eurozone Manufacturing PMI
The Pound Euro (GBP/EUR) exchange rate traded in a narrow range through Monday’s session as markets reacted to the Eurozone’s own PMI figures.
These painted a bleak picture of the bloc’s manufacturing sector, with another slump confounding hopes that the contraction in factory growth would have eased this month.
Looking ahead, in the absence of any notable Eurozone releases the Euro may be left directionless today, as EUR investors await a speech by European Central Bank (ECB) President Christine Lagarde on Wednesday.
GBP/USD Exchange Rate Muted Despite Broad Weakness in the US Dollar
The Pound to US Dollar (GBP/USD) exchange rate was mostly rangebound yesterday in spite of a prevailing USD selling bias which left the ‘Greenback’ on the defensive against most of its peers.
This slump in USD came as investors began to unwind their positions in the currency amid some concerns regarding the recent announcement of a phase one US-China trade deal.
However, the US Dollar may be able to recoup some ground later today thanks to expectations that data will reveal a rebound in domestic industrial production.
GBP/CAD Exchange Rate Softens on Firming Oil Prices
The Pound to Canadian Dollar (GBP/CAD) exchange rate edged lower at the start of the week, with the commodity correlated ‘Loonie’ being buoyed by a bullish pick up in oil, which propelled WTI Crude above $60 a barrel.
GBP/AUD Exchange Rate Steady Following Dovish RBA Minutes
The Pound to Australian Dollar (GBP/AUD) exchange rate was able to hold steady overnight on Monday as the broad weakness in Sterling was offset by a dip in the ‘Aussie’.
This came following the publication of the minutes from the Reserve Bank of Australia’s (RBA) latest policy meeting as they indicated the bank stands ready to cut rates again early next year.
GBP/NZD Exchange Rate Drops in Spite of Trade Jitters
The Pound to New Zealand Dollar (GBP/NZD) exchange rate fell by around half a cent on Monday, with the ‘Kiwi’ able to gain ground in spite of scepticism over a possible US-China trade deal.