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Will GBP slide as Boris Johnson moves into no.10?

business-articlesWill GBP slide as Boris Johnson moves into no.10?
- Disappointing Eurozone flash PMI to weaken the single currency
- Will further Cabinet resignations weigh on Sterling?
- US PMI could buoy the ‘Greenback’

Disappointing Eurozone PMI to weigh on EUR

Yesterday, July’s preliminary Eurozone consumer confidence data rebounded slightly, with the sentiment index increasing from -7.2 to -6.6.

However, as it is unlikely that this will make much of a difference to policymakers at Thursday’s European Central Bank (ECB) meeting the euro failed to benefit.

Meanwhile, the single currency could dip this morning following the release of the bloc’s flash Markit PMI composite index.

The data is expected to show a decline in output in July, a result which would give the ECB more reason to adjust stimulus.

Will Sterling slide as Boris Johnson moves into Downing Street?

On Tuesday it was announced that Boris Johnson had beaten Jeremy Hunt to become the UK’s next Prime Minister and leader of the Conservative Party.

In his victory speech Johnson promised to ‘deliver Brexit, unite the country and defeat Jeremy Corbyn’ and he is scheduled to take over from current Prime Minister Theresa May later today.

Sterling’s reaction to Johnson’s victory was muted but the currency could slump when he officially takes office if other members of the cabinet resign in protest.

Improved US PMI to buoy the dollar

On Tuesday data revealed that US home sales slumped while a shortage of properties pushed prices to record highs.

While the data suggests the US housing market is struggling to bounce back after softening last year, the dollar continued to rally against Sterling as well as a handful of other currencies.

Looking ahead to this afternoon, the US dollar could edge up following the release of the flash US PMI composite if it shows improvement.

Upcoming data:

Wednesday 23rd July 2019
08:30EUR German Markit Manufacturing PMI (July)
09:00EUR Eurozone Markit PMI Composite (July)
14:45USD Markit PMI Composite (July)

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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