The pound faced another day of volatility on Thursday, spiking on news that the UK and EU had finally reached a consensus on Brexit.
Sterling is struggling to find momentum today however, with GBP/EUR flat at 1.1133, GBP/USD steady at $1.2548 and GBP/CAD muted at C$1.6343. Both GBP/AUD and GBP/NZD have edged lower, striking AU$1.7928 and NZ$1.8763 respectively.
Coming up today we may see the euro take centre stage with the publication of the Eurozone’s latest industrial production figures.
What’s been happening?
The pound enjoyed broad gains yesterday, with the UK currency pressing higher against the majority of its peers following the publication of the BoE’s stability review.
While the BoE reported that the risk of a no-deal Brexit has risen since the start of 2019, Sterling sentiment appeared to be buoyed by the bank’s suggestion that the UK economy is more prepared for such a scenario.
Aiding the upswing in the GBP/EUR exchange rate on Thursday was the publication of the minutes from the European Central Bank’s (ECB) June policy meeting, with the euro weakening as analysts suggested they confirmed the bank’s easing bias.
Meanwhile, following Wednesday’s sell-off, the US dollar was able to trim some of its losses as the latest US CPI figures showed a surprise uptick in US core inflation last month.
What’s coming up?
The euro will be in focus this morning thanks to the publication of the Eurozone’s latest industrial production figures.
The report could provide the single currency with a leg up if production returned to growth in May as economists expect.
Meanwhile, with this morning’s speech from the BoE’s Gertjan Vlieghe unlikely to offer any new insights into the bank’s policy outlook, pound movement may be limited.
Finally, in the absence of any notable US data we may see the US dollar struggle to find momentum today amid speculation that the Federal Reserve may pursue multiple rate cuts this year.
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)