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GBP/USD nears three-month high but Brexit jitters cap gains

currency-newsGBP/USD nears three-month high but Brexit jitters cap gains
The pound strengthened against many of its rivals on Monday, climbing to new multi-month highs in spite of ongoing Brexit uncertainty.

However, trade in Sterling appears a little more mixed this morning, with GBP/EUR rangebound at €1.1259 and GBP/USD retreating to $1.2685. GBP/CAD is flat at C$1.7028, while GBP/AUD and GBP/NZD both tick higher, striking AU$1.8265 and NZ$1.9458 respectively.

Coming up today we have the publication of the Eurozone’s latest GDP estimate. Will the euro be limited this morning as they confirm a sharp plunge in growth in the first quarter?

What’s been happening?

The pound trended higher at the start of this week’s session, rallying to a new multi-month high against most of its peers, despite being no clear catalyst for the move.

This uptick in Sterling also came amidst ongoing Brexit jitters as a lack of progress in last week’s talks saw concerns over a no-deal Brexit continue to rise.

Meanwhile, the euro fluctuated on Monday, with the single currency initially retreating in response to some grim industrial production figures from Germany.

The euro recouped some of these losses later in the session, however, after European Central Bank (ECB) President, Christine Lagarde reiterated the bank’s commitment to supporting the Eurozone economy.

Trade in the US dollar was also mixed yesterday as relief at the easing civil rest in US protests over the weekend was offset by an upbeat market mood which limited demand for the safe-haven currency.

What’s coming up?

Looking ahead to today’s session, the only data of note is the publication of the Eurozone’s latest GDP estimate.

This is expected to confirm that growth in the bloc fell sharply in the first quarter, potentially capping any upside in the single currency.

For GBP investors the absence of any data may leave the focus on the UK’s coronavirus statistics, where concerns over a rising R number could scupper the government’s plans to start reopening the economy.

Finally, with a lack of US data, USD investors may turn their eyes toward the souring relations between the US and China, with any flaring of tensions likely to bolster the appeal of the safe-haven currency.
 
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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