Pound (GBP) Tumbles as Brexit Optimism Fades
The Pound (GBP) was sent sharply lower yesterday, with the UK currency giving up almost all of its post-election election gains.
Sterling’s shellacking came in response to the news that Boris Johnson will rule out any additional extensions to Brexit, by enshrining the December 2020 deadline for trade talks into law.
The move proved to be a major wake-up call for GBP investors, who had hoped Johnson would use his massive majority to side-line the hardcore Brexiteers in his party and potentially adopt a more pragmatic approach to the next stage of Brexit negotiations.
Coming up today we have the production of the UK’s consume price index (CPI) which could exert more pressure on the Pound amidst forecasts inflation will have retreated again in November.
GBP/EUR Exchange Rate Surges In Spite of Dovish ECB Comments
The Pound Euro (GBP/EUR) exchange rate sank to pre-exit poll levels on Tuesday as the pairing was rocked by renewed Brexit jitters.
However the single currency faced some headwinds in broader trade after the European Central Bank’s (ECB) Olli Rehn suggested that a more accommodative monetary policy may be warranted in light of stubbornly low Eurozone inflation.
EUR investors will look to ECB President Christine Lagarde to potentially shed more light on how the bank will shape its policy in 2020 when she speaks this morning.
GBP/USD Exchange Rate Slumps as US Industrial Production Impresses
The Pound to US Dollar (GBP/USD) exchange rate shed over a cent in trade during yesterday’s session, with the ‘Greenback’ shaking off its recent weakness on the back of solid domestic industrial data.
The Federal Reserve reported that US industrial production surged 1.1% in November rebounding from a 0.8% contraction in October and dispelling fears the US manufacturing sector is an a downward spiral.
In the absence of any notable US data today, USD investors are likely to keep any eye on US-China headlines as they look for more details regarding the recent deal stuck between the two powers.
GBP/CAD Exchange Rate Sinks on Bullish Oil Prices
The Pound to Canadian Dollar (GBP/CAD) exchange rate slumped over a cent on Tuesday, with the oil-sensitive ‘Loonie’ able to press its advantage against Sterling thanks to the continued rise in crude prices.
However the Canadian Dollar may struggle to extend these gains today, as economists forecast Canada’s latest CPI figures will reveal a slowing of inflation in November.
GBP/AUD Exchange Rate Losses Capped by US-China Trade Jitters
The Pound to Australian Dollar (GBP/AUD) exchange rate fell nearly two cents on Tuesday before stabilising overnight, with further upside in the ‘Aussie’ capped by US-China trade scepticism.
GBP/NZD Exchange Rate Steadies as Risk Appetite Weakens
Movement in the Pound to New Zealand Dollar (GBP/NZD) exchange rate largely mirrored that of GBP/NZD yesterday, with the pairing steadying in overnight trade as market risk appetite waned.
Looking ahead, the ‘Kiwi’ will be in the spotlight later this evening, with the release of New Zealand’s latest GDP figures potentially boosting the currency if growth accelerated in line with expectations in the third quarter.