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Pound rocked by renewed Brexit uncertainty

currency-newsPound rocked by renewed Brexit uncertainty
The pound stumbled yesterday, falling against the majority of its peers as Brexit uncertainties continued to dampen appetite for Sterling.

Sterling appears more resilient this morning however, with GBP/EUR stable at €1.1666, GBP/USD edging up to $1.3102 and GBP/CAD flat at C$1.7493, while GBP/AUD and GBP/NZD both hold steady at AU$1.8385 and NZ$1.9381 respectively.

In focus today will be the US non-farm payrolls, which may see the US dollar retreat if they underperform again in March.

What’s been happening?

The pound retreated on Thursday, breaking a three-day winning streak as heightened Brexit uncertainty applied downward pressure on the currency.

This came as technical talks between the Conservatives and Labour continued yesterday, which despite a statement from Downing Street suggesting that they had been ‘constructive’, had not lead to a breakthrough.

This dented hopes that a new Brexit plan will be ready for next week’s EU summit.

While the weakness in the pound saw the GBP/EUR exchange rate slide yesterday, the pairing’s losses were tempered somewhat after German factory orders were reported to have contracted for a second consecutive month in February, stoking fears of a prolonged slowdown in the Eurozone’s largest economy.

Meanwhile, the GBP/USD exchange rate tumbled around half a cent on Thursday as the US dollar enjoyed a broad pick-up in demand, partly driven by data showing that initial jobless claims in the US dropped to their lowest levels since 1969.

What’s coming up?

Looking ahead, the latest US non-farm payroll figures are expected to be the centre of attention when they are published later this evening.

All eyes will be on March’s figures after the previous release shocked markets by revealing payrolls shrank to a two year low of just 20,000 in February, with the US dollar likely to close the week on a sour note if payrolls remained below expectations last month.

Meanwhile, GBP investors are likely to remain preoccupied by Brexit today as the cross party talks between Labour and the Conservatives continue.

Finally, the euro may find some support this morning after a larger-than-expected rise in German industrial production helped to offset some of the concerns regarding its economy.
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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