GBP Exchange Rate News: Pound gets off to a Poor Start in 2020 as Brexit Uncertainty Lingers

New Year Brexit Jitters Send Sterling (GBP) Lower

The Pound (GBP) entered 2020 on the defensive, slumping against the majority of its peers as it was undermined by Brexit jitters.

The UK is set to officially leave the EU later this month and investors are growing increasingly nervous about the future of the UK economy.

Also adding to the pressure on Sterling was the UK’s final manufacturing reading for December, which revealed the factory sector suffered its second largest contraction since 2012.

Coming up today, the UK’s construction PMI may exert more pressure on GBP exchange rates this morning as economists forecast the construction sector will have remained in a slump at the end of 2019.

 

Euro (EUR) Muted on Broad USD Strength

The Euro (EUR) was rangebound on Thursday, with investors turning bearish towards the single currency in favour of US Dollar (USD).

The Euro also struggled to find support in spite of the Eurozone’s manufacturing PMI being revised slightly higher in December’s final figures.

Looking ahead, the publication of Germany’s consumer price index may help bolster EUR exchange rates later this afternoon as economists forecast it will show an acceleration of inflation in December.

 

US Dollar (USD) Opens 2020 on a High

The US Dollar (USD) got off to a strong start this year, recouping most of its losses from earlier in the week as it found broad support from investors.

The ‘Greenback’s rally was initially fuelled by some New Year optimism, but was further extended over night as US air strikes stoked tensions in the Middle East and bolstered safe-haven demand.

However the US Dollar’s recovery may run aground later this afternoon if the ISM manufacturing PMI reveals the US factory sector suffered yet another contraction in December.

 

Canadian Dollar (CAD) Stalls as Oil Prices Slide to $60 a Barrel

The Canadian Dollar (CAD) was left mostly directionless yesterday as demand for the commodity-linked currency was muted amid a modest fall in oil prices.

CAD investors will be looking to the Bank of Canada’s (BoC) Carolyn Wilkins for fresh impetus today on hopes the BoC’s deputy governor may shed more light on the bank’s plans for 2020.

 

Australian Dollar (AUD) Slips Following US Air Strike in Iraq

The Australian Dollar (AUD) fell overnight on Thursday as investors shied away from risk-sensitive assets in the wake of a US air strike which killed a top Iranian general.

 

New Zealand Dollar (NZD) Weakens in Risk-Off Trade

The New Zealand Dollar (NZD) also fell back overnight, with the ‘Kiwi’ falling victim to the risk-off mood amid rising tensions in the Middle East.

Matthew Andrews

Contact Matthew Andrews


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