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Pound extends gains as MPs reject calls for an election

business-articlesPound extends gains as MPs reject calls for an election
  • Pound rallies as political uncertainty eases
  • US dollar remains under pressure as China trade gap widens
  • Australian dollar falters on slowing gross domestic product
 
Pound remains sensitive to parliamentary developments
 
Comments from Bank of England (BoE) Governor Mark Carney helped to boost the pound yesterday.
 
Carney fuelled market optimism as he revealed that the BoE has revised its Brexit forecasts, suggesting that a no-deal scenario might be less extreme than originally anticipated.
 
Sterling extended gains as MPs backed the Brexit delay bill and rejected Boris Johnson’s calls for a snap election.
 
GBP exchange rates are likely to experience further volatility today as investors keep a close eye on developments in parliament.
 
As long as MPs appear on track to avert an imminent no-deal Brexit the mood towards the pound is likely to remain positive.
 
 
Disappointing non-manufacturing composite index may add to US dollar weakness
 
A narrowing of the US trade deficit limited the strength of USD exchange rates yesterday.
 
The US dollar could come under further pressure this afternoon if the ISM non-manufacturing composite index fails to improve as forecast.
 
Evidence that the service sector also lost momentum in August could add to existing worries over the economic outlook, increasing the risk of further Federal Reserve policy loosening.
 
 
Australian dollar vulnerable ahead of construction PMI
 
While the Australian dollar rallied overnight on the back of robust domestic trade data, AUD exchange rates could lose their appeal if tonight’s August construction PMI fails to show improvement.
 
If the construction sector remains deep in contraction territory it could dent confidence in Australia’s economic outlook.
 
Upcoming Data:
 
Thursday, 5th September 2019
15:00 USD ISM Non-Manufacturing Composite Index
23:30 AUD Construction PMI
 
 
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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