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Profit-taking sends GBP away from best levels

business-articlesProfit-taking sends GBP away from best levels
  • Sterling fluctuates after Election results 
  • Euro rangebound before PMI figures
  • US dollar bolstered by US-China trade news
 
Pound exchange rates drift lower

After soaring in response to the Conservative’s decisive election victory the pound quickly began shedding ground through Friday’s session.

This downtrend in Sterling appeared to be brought on by a strong bout of profit taking, with GBP investors seeking to book their gains after a turbulent few months in UK politics.

The pound has risen once again this morning however and UK politics will remain front and centre as Boris Johnson is expected to seek to push his EU withdrawal deal through parliament, potentially buoying Sterling if it grants more clarity on Brexit.

In the meantime the publication of the UK’s PMI figures may drag on the pound on expectations the private sector will have remained in contraction in December.
 
Eurozone PMI figures in focus 

The euro was mostly rangebound at the end of last week.

The absence of any notable data gave rise to renewed concerns over Eurozone growth, with analysts expressing concerns that Italy and Germany may be unable to avoid a recession in 2020.

The publication of the Eurozone’s PMI figures could help underpin some gains in the euro this morning if growth in the bloc’s private sector continued to show improvement this month.
 
US dollar supported by trade headlines 

The US dollar performed strongly on Friday, being buoyed by the announcement that the US and China had signed off on a phase-one trade deal.

USD gained vs. GBP and EUR, although the currency’s uptrend was capped by a lack of deal details. 

The publication of the Empire State Manufacturing Index could provide some modest support to the US dollar this afternoon as economists forecast a slight improvement in factory activity in December.
 
Upcoming data:
 
09:00 EUR Markit Manufacturing/Services PMI 
09:30 GBP Markit Manufacturing/Services PMI 
14:45 USD Empire State Manufacturing 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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