Worries over the health of the German economy continued to mount as signs from manufacturing data pointed towards a fourth quarter slowdown.
Sterling is struggling to hold on to these gains this morning however, with GBP/EUR muted at €1.0759, GBP/USD sliding to $1.2043 and GBP/CAD retreating to C$1.5957. Both GBP/AUD and GBP/NZD have stumbled, falling to AU$1.7825 and NZ$1.8685 respectively.
Coming up today we have the release of the UK’s latest employment figures. The pound may extend its rally if domestic wage growth rises in line with expectations.
What’s been happening?
After falling heavily on Friday the pound roared higher at the start of this week’s session as GBP investors focused on the latest Brexit reports.
Reuters reported that Labour is speaking with the other parties in Parliament to discuss the possibility of calling a vote of no-confidence in Boris Johnson at the start of September.
Further lifting Sterling sentiment were reports that MPs opposed to a no-deal Brexit are exploring alternative ways to prevent the UK from crashing out of EU, including compelling the PM to ask the EU for another extension to the Brexit deadline.
Meanwhile the euro was left subdued on Monday as EUR investors continued focusing on the political turmoil in Italy, where the fragile coalition government is through to be days away from collapsing.
The US dollar also struggled to find momentum yesterday as rhetoric between the US and China saw trade tensions continue to escalate, stoking concerns that the Federal Reserve may need to continue easing monetary policy to protect the US economy from any knock on effects.
What’s coming up?
In the spotlight today we have the publication of the UK’s latest jobs report.
This may see the pound maintain its upward trajectory if domestic wage growth rises in line with projections in June.
Meanwhile, likely weighing on the euro this morning will be the publication of the Eurozone’s economic sentiment index, with economists forecasting a decline in confidence.
Closing out today’s session will be the publication of the latest CPI figures, with the US dollar potentially strengthening if inflation accelerated last month as expected.
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)