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Pound under pressure thanks to fresh Brexit deadlock

business-articlesPound under pressure thanks to fresh Brexit deadlock
  • Latest Brexit deadlock encourages pound selling
  • Canadian dollar muted ahead of growth data
  • US dollar shakes off downgraded gross domestic product
 
Lack of Brexit breakthrough limits pound appeal
 
After MPs failed to make any breakthrough on Brexit in Wednesday’s series of indicative votes the mood towards the pound has remained largely negative.
 
With Theresa May seeking another parliamentary vote on Brexit this afternoon further volatility is likely in store for GBP exchange rates.
 
Unless markets see signs of a clear path forward emerging the appeal of the pound could struggle to recover.
 
A decline in net consumer credit could put additional pressure on GBP exchange rates this morning, meanwhile, as confidence in the economy outlook diminishes.
 
Growth uptick to boost Canadian dollar
 
The Canadian dollar could find a solid rallying point this afternoon if January’s gross domestic product data improves as forecast.
 
Investors expect to see growth accelerate 1.5% on the year, with the monthly reading also reversing December’s slight contraction.
 
Evidence of rising growth momentum within the Canadian economy could help to diminish the likelihood of the Bank of Canada (BOC) shifting further into dovishness.
 
On the other hand, if GDP fails to match expectations demand for the Canadian dollar could decline sharply.
 
 
US dollar pushes higher ahead of inflation data
 
Yesterday’s underwhelming US gross domestic product report failed to put the US dollar under any particular pressure, even as worries over a potential recession persisted.
 
However, USD exchange rates could come under pressure this afternoon if January’s personal consumption expenditure core reading shows any signs of weakness.
 
As the Federal Reserve’s preferred measure of inflation any softness here would give policymakers additional incentive to leave interest rates on hold for longer.
 
If inflationary pressure shows signs of picking up, though, the US dollar may extend its gains ahead of the weekend.
 
Upcoming Data:
 
Friday, 29th March 2019
09:30 GBP Net Consumer Credit
12:30 CAD Gross Domestic Product
12:30 USD Personal Consumption Expenditure Core
 
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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