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Pound bounces after UK-Irish Brexit statement

business-articlesPound bounces after UK-Irish Brexit statement
  • Joint UK-Irish Brexit statement fuels pound gains
  • Canadian dollar under pressure ahead of labour market data
  • Disappointing consumer price index dents US dollar
Hopes of Brexit breakthrough support pound
The release of a joint statement from Boris Johnson and Irish leader Leo Varadkar saw the pound leap yesterday afternoon.
Although the statement only indicated that the two sides see a ‘pathway to a possible deal’ this was still enough to give GBP exchange rates a boost.
In the wake of August’s weaker-than-expected monthly gross domestic product reading, however, the potential for fresh pound losses remains.
Unless we see a more tangible breakthrough on Brexit, GBP exchange rates look vulnerable to renewed selling pressure.
Lack of labour market tightening to limit Canadian dollar appeal
A modest uptrend in oil prices failed to keep the Canadian dollar from softening on Thursday thanks to lingering market anxiety.
CAD exchange rates could fade additional losses this afternoon unless September’s raft of Canadian labour market data impresses investors.
With the headline employment change figure expected to show a smaller increase on the month this could fuel speculation that the labour market is struggling to tighten further.
However, any improvement in the latest average hourly wages figures could encourage the Canadian dollar to gain some ground ahead of the weekend.
Weakening consumer sentiment to drive further US dollar losses
USD exchange rates came under pressure amid hopes that the latest set of US-China trade talks could lead to some manner of agreement.
Coupled with the US consumer price index’s failure to pick up as forecast this left the US dollar on the back foot.
As forecasts point towards another decline in the University of Michigan consumer sentiment index the US dollar may fall further out of favour today.
With lower levels of consumer confidence likely to drive a decline in spending, further limiting economic growth, another dip would leave USD exchange rates biased to the downside. 
Upcoming Data:
Friday, 11th October 2019
13:30 CAD Unemployment Rate
15:00 USD University of Michigan Consumer Sentiment 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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