The pound was turbo charged overnight on Thursday, with the currency flying high after the exit poll suggested the Conservatives were on track for a major win.
Sterling appears to have run out of steam this morning however, with GBP/EUR muted at €1.1147, GBP/USD rangebound at $1.2308 and GBP/CAD subdued at C$1.6248. GBP/AUD and GBP/NZD have both weakened, sliding to AU$1.8025 and NZ$1.235 respectively.
The US economy will be in the spotlight today, will the latest US payroll figures be able to pull the US dollar out of its recent slump?
What’s been happening?
The pound extended its recovery into a third consecutive session on Thursday as markets grew increasingly optimistic about the chances of the UK avoiding a no-deal Brexit on 31 October.
Following three major defeats in parliament earlier in the week, Boris Johnson’s government was dealt another blow yesterday after the PM’s brother Jo Johnson’s announced his shock resignation as an MP and minister.
Trade in the euro was mostly subdued through Thursday’s session in response to alarming German factory order figures, as the continued slump in the country’s manufacturing sector raises the risk of the Eurozone’s largest economy slipping into a recession.
While US data printed stronger than expected yesterday, with the ISM non-manufacturing PMI climbing to a three-month high in August, it failed to re-energise the US dollar, which continued its bearish downtrend.
What’s coming up?
Top of the agenda for investors today will be the publication of the latest US payroll figures.
Economists forecast that US employment growth will have remained relatively strong in August, but given the recent selling pressure on USD, will this be enough to help reverse some of the US dollar’s recent losses?
We expect UK political headlines to continue acting as the main catalyst of movement in the pound today, potentially driving further gains if the risks of a no-deal Brexit continue diminishing.
Finally, the publication of Germany’s industrial production figures this morning may continue to limit the appeal of the euro throughout today’s session as another contraction in output casts further gloom over the country’s manufacturing sector.
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)