The pound trended broadly lower through June, the currency being primarily undermined by concerns over the UK’s economic trajectory.
Sterling appears to be consolidating these gains this morning, with GBP/EUR stable at €1.1716, GBP/USD buoyed at $1.3132, and GBP/CAD flat at C$1.7137. GBP/AUD and GBP/NZD are both holding steady at AU$1.8745 and NZ$1.9519 respectively.
Looking ahead it’s likely to be a quiet day in the currency markets today as we head into the New Year holiday.
What’s been happening?
The pound trended higher at the start of this week’s session as the currency was able to shrug off some Brexit jitters in the absence of any major headlines.
Aiding Sterling’s advance on Monday was the publication of some surprisingly strong UK mortgage figures.
UK Finance reported mortgage approvals rose from 41,300 to 43,700 in November, striking their highest levels in over two-years in spite of the UK being plagued by election uncertainty at the time.
Meanwhile, Friday’s USD selling bias persisted into the new week, with the safe-haven US dollar being shunned by investors as rising US-China trade optimism saw them flock to riskier assets.
The continued slump in the US dollar proved a boon for the euro, which enjoyed some modest support thanks to EUR/USD’s position as the most traded currency pair.
What’s coming up?
With the market heading into another mid-week holiday, trading volumes will remain low today, likely limiting volatility in the pound, euro and US dollar.
However, there will be some notable data for investors to dig into when markets re-open in the New Year.
For USD investors the focus will be on the minutes from the Federal Reserve’s latest policy meeting, where traders will be looking for greater clarity on the bank’s policy plans for 2020.
Potentially extending the euro’s recent rally will be the publication of Germany’s consumer price index, which is forecast to show a healthy rise in domestic inflation in November.
Finally, in the UK some gloomy PMI figures could weigh on the pound through the latter half of the week as growth in the manufacturing and construction sectors is set for another contraction in December.
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)