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Pound jumps as no-deal Brexit taken off the table

business-articlesPound jumps as no-deal Brexit taken off the table
  • Pound continues uptrend after MPs reject no-deal
  • Stagnant housing prices may dent Canadian dollar
  • US dollar losses likely on weaker import price index
 
Brexit uncertainty fails to put pound under pressure
 
The pound pushed higher overnight as UK MPs voted to rule out a no-deal Brexit, encouraging a sense of market optimism.
 
Even though the UK’s future remains uncertain, with Theresa May now set to put her Brexit deal to a third vote, GBP exchange rates still recovered ground in the wake of the news.
 
Confidence in the pound could falter this afternoon, however, if Parliament fails to approve a delay to the Article 50 deadline.
 
As long as a sense of political uncertainty persists GBP exchange rates’ gains may prove fragile, with an extended period of parliamentary paralysis likely to discourage investors.
 
 
Canadian dollar vulnerable to housing price stagnation
 
Although rising oil prices offered a boost to the Canadian dollar yesterday this uptrend could unravel in the face of today’s new housing price index data.
 
Forecasts point towards prices continuing to stagnate in January, highlighting the continued weakness of the Canadian housing market.
 
This would not bode well for the outlook of the wider Canadian economy, with confidence in the growth outlook already generally diminished.
 
Unless house prices show signs of picking up the mood towards the Canadian dollar is likely to sour today.
 
 
Weaker import prices to weigh on US dollar
 
Confidence in the US dollar could diminish further this afternoon on the back of February’s import and export price index figures.
 
As investors expect to see a sharp decline in import prices on the year USD exchange rates look vulnerable to a fresh downtrend.
 
With the US-China trade spat continuing to weigh on the US economy any signs of weakening trade conditions could weigh heavily on the US dollar.
 
On the other hand, an uptick in export prices may encourage USD exchange rates to return to a stronger footing.
 
Upcoming Data:
 
Thursday, 14th March 2019
12:30 CAD New Housing Price Index
12:30 USD Import Price Index
12:30 USD Export Price 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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