The pound surged overnight, hitting a three-year high against the euro and an over one-year high against the US dollar.
- Pound falters as MPs vote against Johnson’s legislative timetable
- Trudeau’s election victory lends Canadian dollar limited support
- Euro vulnerable to Eurozone consumer confidence decline
Prospect of general election weakens GBP
The pound was left reeling on Tuesday after MPs rejected Boris Johnson’s attempts to fast-track the Withdrawal Agreement bill through parliament.
While MPs backed the bill in principle, a subsequent vote on the timetable for passing the legislation by the end of the week ended in defeat for the government. The move resulted in a sharp drop in Sterling as Johnson ‘paused’ the bill.
Johnson is expected to call for an immediate election if the EU offers a delay until at least January, the prospect of which may fuel further volatility in Sterling.
Canadian dollar supported by election results
As Justin Trudeau secured a narrow victory in the federal election the mood towards the Canadian dollar improved.
However, as Trudeau lost his majority the prospect of further political disruption in the coming months limited the potential for CAD exchange rate gains.
Worries over the outlook of the Canadian economy could pick up this afternoon, meanwhile, as forecasts point towards a sharp slowdown in August’s wholesale trade sales.
Evidence of weakening business confidence may drag heavily on the Canadian dollar, even if the general mood of markets remains positive.
Weakening Eurozone consumer confidence could add to euro losses
The euro struggled to gather momentum yesterday and as forecasts point towards another month of decline from October’s Eurozone consumer confidence index EUR exchange rates look vulnerable to further losses today.
A lower level of consumer confidence could add to existing concerns over the health of the Eurozone, given the pressure the economy already faces from deteriorating global trade.
The euro could edge lower this afternoon if consumer optimism fails to improve.
Wednesday, 23rd October 2019
13:30 CAD Wholesale Trade Sales
15:00 EUR Eurozone Consumer Confidence Index
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)