The pound trended broadly lower through June, the currency being primarily undermined by concerns over the UK’s economic trajectory.
Sterling remains in a narrow range this morning, with GBP/EUR muted at €1.1593, GBP/USD flat at $1.2932, and GBP/CAD subdued at C$1.6896. GBP/AUD and GBP/NZD have both firmed, rising to AU$1.8889 and NZ$2.0187 respectively.
The European Central Bank (ECB) will be in the spotlight today. Will a gloomy outlook put pressure on the euro?
What’s been happening?
The pound was left directionless on Wednesday in response to renewed Brexit uncertainty.
MP’s voted on Tuesday to reject the timetable for Boris Johnson’s Brexit bill, making it near impossible for the UK to leave on 31 October with a deal in place.
As a result Sterling was left adrift in the middle of the week as markets await a response from the EU on whether to grant the UK yet another extension in order to avoid a damaging no-deal Brexit.
The euro was also a victim of the rising Brexit uncertainty yesterday. Some gloomy consumer confidence figures also contributed to the downside in EUR exchange rates.
Meanwhile, the US dollar’s attempts to rally were undermined by renewed concerns over the health of the US economy.
This came as US aerospace manufacturer Boeing and construction equipment firm Caterpillar both reported weak results in the third quarter, sparking fears over the US manufacturing sector.
What’s coming up?
Potentially drawing some attention away from Brexit today will be the ECB’s latest rate decision.
While no policy changes are expected from the bank this month, the euro may come under pressure if policymakers continue to warn of the downside risks facing the Eurozone.
Also on the docket for EUR investors today will be the Eurozone’s PMI figures, which could dent the single currency if private sector growth in the bloc remains lacklustre.
For GBP investors the focus will, of course, remain on Brexit.
Finally, the publication of US durable goods figures will keep the US manufacturing sector in focus today, with a suspected contraction in goods orders last month poised to drag on the US dollar.
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)