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Lack of Brexit resolution adds to pound losses

business-articlesLack of Brexit resolution adds to pound losses
  • Pound stumbles as MPs push for Brexit delay
  • Negative US growth indicator weighs on US dollar
  • Underwhelming Chinese trade fails to drag on Australian dollar
 Continuing Brexit uncertainty limits pound potential
After Boris Johnson was forced to seek a three-month extension to the Brexit deadline the pound remained under pressure.
GBP exchange rates could find a rallying point today however if Johnson is able to force through a fresh ‘meaningful vote’ to gauge support for his Brexit deal as it stands.
Even so, the lingering sense of uncertainty hanging over the UK’s future relationship with the EU looks set to limit the appeal of the pound in the days to come.
US dollar vulnerable to fresh budget deficit
Another negative monthly reading from the US leading index left USD exchange rates lacking in support ahead of the weekend.
This latest disappointment suggests that the world’s largest economy is still struggling to find fresh momentum in the face of ongoing trade tensions with China and the EU.
Further losses could be in store for the US dollar this evening if September’s monthly budget statement shows another deficit.
Given existing worries over the health of the US outlook any weakening of its fiscal position may weigh on USD exchange rates.
Australian dollar shakes off global growth worries
A weaker-than-expected Chinese gross domestic product reading failed to drag the Australian dollar down on Friday as investors took encouragement from a sharp uptick in September’s Chinese industrial production figure, boosting risk appetite.
However, given the volatile nature of global geopolitics the risk-sensitive Australian dollar may struggle to hold its positive footing for long.
Any deterioration in the latest ANZ weekly consumer confidence index could also dent AUD exchange rates given existing worries over the health of the domestic outlook.
Upcoming Data:
Monday, 21st October 2019
19:00 USD Monthly Budget Statement
22:30 AUD ANZ Roy Morgan Weekly Consumer Confidence Index
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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