If you are having difficulty locating the information you require, we're here to help. Just get in touch and we will do our best to assist you.

GBP/USD plunges to $1.23 on growing market jitters

currency-newsGBP/USD plunges to $1.23 on growing market jitters
The pound fell sharply at the end of last week’s session, with the currency undermined by souring market sentiment and fresh Brexit jitters.

Meanwhile, trade in Sterling is mixed at the start of this session, with GBP/EUR rangebound at €1.0989 and GBP/USD buoyed at $1.2370. GBP/CAD is flat at C$1.6885, while GBP/AUD and GBP/NZD hold steady at AU$1.7966 and NZ$1.9207 respectively.

Looking to the week ahead, we expect Brexit to act as a major catalyst for movement as the latest round of talks between the UK and EU get underway.

What’s been happening?

The pound was met by a sharp sell-off in Friday’s session, in response to a downbeat market mood on top of renewed Brexit jitters.

The pound’s losses came on the back of comments from German leader Angela Merkel, who appeared to harden her tone by telling the UK it will have to ‘live with the consequences’ of a hard Brexit.

Merkel had previously been open to a deal which would allow the UK to maintain close trade ties with the EU, so her recent change in tone is a worrying development for GBP investors.

Meanwhile, the US dollar closed last week on a high, with a spike in US coronavirus cases in some states spooking investors and bolstering demand for the safe-haven ‘greenback’.

Finally, the euro was mostly rangebound at the end of last week’s session as European Central Bank (ECB) President Christine Lagarde warned the Eurozone's economic recovery ‘will be a complicated matter’, but that the ECB remains committed to supporting it in anyway necessary.

What’s coming up?

Turning to this week’s session, the spotlight looks to be on Brexit as the UK and EU look to kick off ‘intensified’ talks over the summer.

This is likely to limit any upside in the pound throughout the week, so long as the two sides remain in deadlock over the terms of a post-Brexit trade deal.

For EUR investors, the focus at the start of this week will be on the Eurozone’s latest business confidence figures. Will another improvement in economic sentiment in the bloc this month help to bolster the Euro?

In the US, all eyes will be on the upcoming ISM manufacturing PMI as USD investors seek confirmation that the US economy showed signs of recovery this month.
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)

Check our exchange rate

Thanks, we'll be in touch.

Check your inbox - one of our currency experts will be in touch to complete your quote.

If you want see our online exchange rates straight away, simply register online & log in.