The pound recorded some short lived gains yesterday as polling data continued to favour the Conservative party in the upcoming election.
Sterling remains rangebound this morning, with GBP/EUR stable at €1.1067, GBP/USD muted at $1.2158 and GBP/CAD subdued at C$1.6192, while GBP/AUD and GBP/NZD hold steady at AU$1.8066 and NZ$1.9286 respectively.
Coming up this morning, will the UK’s manufacturing PMI have any bearing on GBP exchange rates, or will investors remain preoccupied by domestic politics?
What’s been happening?
The pound traded in a narrow range through Friday’s session as Brexit jitters continued to weigh on sentiment.
Boris Johnson also warned that efforts to block a no-deal Brexit could increase the chances it will happen.
Meanwhile the euro stumbled at the end of last week’s session in response to the Eurozone’s latest CPI print.
This revealed inflation within the bloc languished at just 1% in August, stoking expectations for a ‘substantial’ stimulus package from the European Central Bank (ECB) this month.
At the same time, USD exchange rates came under pressure on Friday after Donald Trump launched another attack on the Federal Reserve, bemoaning the strength of the US dollar and blaming in on the Fed’s inaction on monetary policy.
What’s coming up?
Today we have the publication of the UK’s latest manufacturing PMI.
The pound could be left on the back foot if growth in the UK’s factory sector continued to contract in August, as most economists forecast.
However Sterling movement will be limited ahead of the reopening of Parliament on Tuesday, as markets brace for a political showdown between Boris Johnson and opposition MPs.
Johnson has threatened to deselect any Conservative MPs who rebel against the party this week, a move which could cause chaos in parliament if it results in the government losing its majority.
The final reading of the Eurozone’s manufacturing PMI for August could limit the appeal of the euro this morning as it is expected to confirm factory growth in the bloc contracted for a sixth month in a row.
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)