The euro traded in a wide range on Thursday as the European Central Bank (ECB) unveiled fresh stimulus measures aimed at bolstering growth in the Eurozone.
Sterling appears to be holding its ground this morning however, with GBP/EUR stable at €1.0936, GBP/USD flat at $1.2138 and GBP/CAD steady at C$1.6139. GBP/AUD and GBP/NZD are both trending higher, striking AU$1.7922 and NZ$1.9001 respectively.
The Eurozone’s latest PMI figures could prompt euro losses this morning if growth in the bloc’s private sector continued to slow.
What’s been happening?
Brexit was back in the headlines again yesterday, as Boris Johnson travelled to Berlin to hold talks with German Chancellor Angela Merkel.
While the talks appeared optimistic, with Merkel suggesting a solution to the backstop could be found within 30 days, it failed to inspire markets.
Consequently the pound trended lower on Wednesday, with further pressure placed on Sterling after Ireland’s Deputy Prime Minister claimed the UK’s hardline stance makes a no-deal Brexit ‘far more likely’.
The US dollar fared better as the FOMC minutes bolstered USD sentiment by revealing that policymakers viewed last month’s rate cut as a mid-cycle adjustment and not the start of a new easing cycle.
Meanwhile, the euro held its ground in spite of Italy’s ongoing political crisis, with markets content to leave the single currency static until there is a clearer picture on how the situation may develop.
What’s coming up?
The Eurozone’s latest PMI figures are in the spotlight today.
The data could put significant pressure on the euro this morning as economists forecast growth in the bloc’s private sector slowed again in August.
Such a result would bolster expectations of a substantial stimulus package from the European Central Bank (ECB) next month.
The pound may also face headwinds today as Boris Johnson meets with French President Emmanuel Macron after France stated it is now operating on the assumption that a no-deal Brexit is the most likely outcome.
Finally, the Fed will remain in focus for USD investors as the bank’s annual Jackson Hole Symposium gets underway, with markets looking out for insights into how the Fed may act in regards to monetary policy.
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)