The US dollar pressed higher on Wednesday, rising on the back of fresh coronavirus uncertainty.
The pound trended lower on Monday, relinquishing some of last week’s gains as Brexit returned to focus.
Sterling remains mostly muted this morning, with GBP/EUR subdued at €1.1982 and GBP/USD slipping to $1.2977. GBP/CAD is flat at C$1.7191,while GBP/AUD and GBP/NZD hold steady at AU$1.9410 and NZ$2.0241 respectively.
Looking ahead, the focus today will be on the UK’s latest jobs report. Will a slump in wage growth drag on GBP exchange rates?
What’s been happening?
The pound trended lower against the majority of the peers at the start of this week as it fell victim to fresh Brexit uncertainty.
This was initially triggered by comments from French foreign minister Jean-Yves Le Drian, who warned that the UK and the EU would ‘rip each other apart’ in trade negotiations.
These concerns were then stoked further by a spokesperson for Boris Johnson who said the UK will not be looking for anything special in trade negotiations with the EU.
The euro was mostly flat through Monday’s trading session, with the appeal of the single currency being dented by warnings from economists that the coronavirus could cause considerable damage to the Eurozone economy and may even see Germany and Italy slip into a recession if the crisis continues through to the summer
Meanwhile, the US dollar was also rangebound yesterday as the closure of US markets for Presidents' Day created some thin trading traditions.
What’s coming up?
In the spotlight today he have the publication of the UK’s latest employment report.
Economists forecast today’s figures will show that the UK’s unemployment rate held at a 44-year low in December.
However, the accompanying earning’s figures will be the focus for GBP investors, with the pound set to fall if wage growth slows in line with forecasts.
In Europe the publication of the latest ZEW surveys are likely to dictate the direction of the euro this morning, with the single currency potentially strengthening if economic sentiment improved this month.
Meanwhile, the US dollar may trend higher later this afternoon if the Empire State manufacturing index ticks higher this month.
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)