If you are having difficulty locating the information you require, we're here to help. Just get in touch and we will do our best to assist you.

Pound tumbles, markets rattled as election speculation mounts

currency-newsPound tumbles, markets rattled as election speculation mounts
The pound got off to a poor start this week as heightened political uncertainty in the UK spooked markets.

The Sterling sell off is gathering momentum this morning, with GBP/EUR slumping to €1.0950, GBP/USD nosediving to $1.1984 and GBP/CAD plummeting to C$1.5983. Both GBP/AUD and GBP/NZD have tumbled, sliding to AU$1.7830 and NZ$1.9054 respectively.

Expect to see UK politics remain front and centre today as Parliament reopens following the summer recess for what looks to be a dramatic showdown between the government and MPs opposed to a no-deal Brexit.

What’s been happening?

The pound plunged at the start of this week, driven in part by speculation that a snap election could be called this week.

Reports suggest Boris Johnson will seek to hold an early election if MPs succeed in blocking a no-deal Brexit this week, the prospect of which soured Sterling sentiment.

Further pressuring GBP exchange rates yesterday was the UK’s latest manufacturing PMI, which revealed growth in the factory sector slumped to a seven-year low in August.

The euro also struggled on Monday. Rising expectations for an aggressive rate cut from the European Central Bank (ECB) saw EUR/USD fall back below $1.10 and refresh a two-year low, a development which prompted Donald Trump to describe the euro as ‘dropping like crazy’ last week.

As a result of broad weakness in its peers and rising US-China trade optimism, the US dollar proved to be the big winner yesterday, maintaining its bullish run in spite of US markets being closed for Labour Day. 

What’s coming up?

UK political developments may continue to act as the main catalyst of movement in the pound today as MPs return from summer recess.

It’s set to be chaotic session in parliament today as MPs are expected to put forth legislation aimed at blocking a no-deal Brexit, with a defeat for the government potentially triggering calls for a snap election.

Coming up later this afternoon, the ISM manufacturing PMI could force the US dollar to relinquish some ground as economists forecast US factory growth will have continued to slow in August.

Meanwhile, the euro is likely to remain on the back foot through today’s session as an increasingly gloomy Eurozone growth outlook and dovish ECB expectations limit the appeal of the single currency.
 
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)

Check our exchange rate

Thanks, we'll be in touch.

Check your inbox - one of our currency experts will be in touch to complete your quote.

If you want see our online exchange rates straight away, simply register online & log in.