Pound exchange rates subdued in build-up to key EU summit
Philip McHugh June 26th 2018 - 2 minute read
Trade in the pound was fairly mixed on Monday, with Brexit uncertainty weighing heavily on the currency ahead of an EU summit later in the week.
Sterling appears to have stabilised this morning, with GBP/EUR flat at €1.1349, GBP/USD trading narrowly at $1.3273, and GBP/CAD stable at C$1.7650. While both GBP/AUD and GBP/NZD are holding steady at AU$1.7926 and NZ$1.9300 respectively.
Looking ahead, the UK will publish its latest mortgage figures this morning, although forecasts of a muted result means the data is not expected to have much of an impact on the GBP exchange rate.
What’s been happening?
The pound struggled to find its feet at the start of this week’s session as the shadow of Brexit loomed over the UK currency once again.
The renewed focus on Brexit came in the run up to a key EU summit later this week, in which Prime Minister Theresa May will present her proposals for a post-Brexit customs agreement, something which did not appear to elicit much confidence in Sterling.
The GBP/EUR exchange rate fell back during yesterday’s session, with a broad-based rise in euro sentiment helping the single currency to accelerate to its best levels since the European Central Bank (ECB) driven sell-off earlier in June.
Meanwhile trade war fears dominated the GBP/USD exchange rate on Monday, with the pairing holding steady as US-China trades tensions escalated.
Sunday night saw reports emerge that Trump was drawing up plans to curb Chinese investment in the US, while also limiting US companies from exporting certain technologies to China, a move which further damaged trade relations with Beijing.
What’s coming up?
This morning will see the release of the UK’s latest mortgage approval figures.
Economists forecast a fairly subdued reading in May and barring any major surprises the reading is not expected to have any notable impact on pound exchange rates.
At the same time, the US dollar could be prompted to move higher during today’s session should a speech by Robert Kaplan indicate that the Federal Reserve policymaker favours a rate path which would see interest rates continue to accelerate this year.
Movement in the euro meanwhile is expected to be fairly muted today, with a lull in Eurozone data providing limited opportunity for the single currency to advance.