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Pound exchange rate steady as markets await key Brexit vote

currency-newsPound exchange rate steady as markets await key Brexit vote
The pound sought to tick higher yesterday as markets braced for today’s Brexit vote in the House of Commons. 

Sterling appears to be struggling a bit this morning however, with GBP/EUR flat at €1.1226, GBP/USD muted at $1.2869 and GBP/CAD edging down to C$1.7057, while both GBP/AUD and GBP/NZD trending lower, striking AU$1.7833 and NZ$1.8815 respectively.

Brexit looks to dominate currency markets today, with MPs delivering their verdict on Theresa May’s Brexit deal likely resulting in some notable volatility later this evening.

What’s been happening?

The pound held steady at the start of this week’s session as investors looked to hold their positions ahead of a key parliamentary vote on Theresa May’s Brexit deal later today.

Markets did see some limited upside to Sterling however, with GBP spiking later in the evening following rumours that a pro-Brexit faction within the Conservatives may back the deal in order to avoid a possible no-Brexit.

Lending some support to the GBP/EUR exchange rate was the release of the Eurozone’s latest industrial production figures, with a sharp drop in production stroking fears that some of Europe’s largest economies may be hurtling towards a recession.

Meanwhile, the GBP/USD exchange rate traded in a narrow range yesterday after the US dollar was bolstered by the release of China’s latest trade figures, with a drop in Chinese exports stoking fears of a slowdown and dampening risk appetite.

What’s coming up?

Looking ahead, this evening’s Brexit vote in the House of Commons looks set to dominate currency markets today.

The vote is largely expected to see MPs reject Theresa May’s EU withdrawal deal – something that is likely to result in significant volatility in the pound and throughout broader currency markets.

Meanwhile, EUR investors are likely to focus on Germany’s 2018 GDP report this morning, with the euro expected to slump if it is confirmed that Europe’s largest economy entered a recession in the fourth quarter.

Finally, the latest US PPI figures may drag on the US dollar later this afternoon, as economists forecast producer prices will have slipped in December.
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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