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Election bets send pound tumbling

business-articlesElection bets send pound tumbling
  • Pound under pressure as Parliament reconvenes
  • US dollar could fall if ISM manufacturing PMI disappoints
  • ‘Aussie’ storms higher after RBA decision

Pound slumps, politics dominates outlook

The pound tumbled on Monday as markets braced themselves for a pivotal week in UK politics. Sterling also suffered as the latest Markit PMI report revealed that the UK manufacturing sector had fallen deeper into contraction, with output hitting a seven-year low.

Further GBP volatility is likely today as reports suggest Prime Minster Boris Johnson is considering calling an early general election if MPs defeat government and vote to block a no-deal Brexit when parliament reconvenes.

This morning’s UK construction PMI data is unlikely to have much impact but another disappointing figure won’t do GBP any favours.
US manufacturing PMI to weigh on the dollar?  

US markets remained closed on Monday for Labour Day, leaving the ‘Greenback’ relatively subdued. The safe-haven US dollar was able to make small gains as risk-appetite diminished as the US and China hit each other with further tariffs.

Looking ahead to this afternoon, the US dollar could dip if August’s ISM Manufacturing PMI shows a decline in output.  
RBA rate decision bolsters AUD exchange rates

The Australian dollar stormed higher overnight as the Reserve Bank of Australia (RBA) left interest rates on hold. Policymakers also appeared positive about the nation’s economic outlook.  

Upbeat second quarter growth data could help the ‘Aussie’ extend gains during the Australasian session.
Upcoming Data:

3rd September
09:30   GBP Construction PMI (Aug)
15:00   USD ISM Manufacturing PMI (Aug)

4th September
02:30   AUD GDP (Q2)
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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