The pound edged away from a multi-year high at the end of last week as investors engaged in some profit taking.
Sterling appears to be consolidating these gains so far this morning with GBP/EUR flat at €1.1703, GBP/USD muted at $1.2955, and GBP/CAD stable at C$1.7107. GBP/AUD and GBP/NZD are holding steady at AU$1.9035 and NZ$2.0229 respectively.
UK politics will remain in focus today as markets brace for a head-to-head TV debate between Boris Johnson and Jeremy Corbyn.
What’s been happening?
The pound shot higher at the start of this week, rising on the back of UK political optimism.
Sterling sentiment improved as the latest polling figures show the Conservatives extending their lead against Labour, with some even showing the Tories as much as 13 points ahead.
Some observers are starting to speculate on the chances of the Tories managing to win a majority in Parliament, allowing Boris Johnson to push his Brexit deal through with minimal fuss.
Meanwhile, the US dollar faced some broad losses yesterday, with US-China trade uncertainty weighing on the currency.
This follows a report by CNBC suggesting that Chinese officials are increasingly pessimistic about the chances of a deal, due to Donald Trump’s reluctance to roll back tariffs.
As a result the euro found itself once more rising on the back of USD weakness.
What’s coming up?
Looking ahead, UK politics will continue to act as the main catalyst of movement in the pound today.
This will be mostly focused around a one-on-one TV debate between Boris Johnson and Jeremy Corbyn later this evening.
The hour long debate will be the first chance for the two to really take the gloves off, with Sterling sentiment potentially taking a hit if Corbyn manages to come out on top.
Also being closely watched by markets today will be the ongoing US impeachment inquiry, with USD investors bracing for potential fireworks as today’s proceedings include appearances by senior national security officials.
Finally, in Europe we have the release of the Eurozone’s latest construction figures, with the euro potentially finding support if output accelerated in line with expectations in September.
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)