Pound exchange rates soften as May makes final push for Brexit deal
Philip McHugh November 22nd 2018 - 2 minute read
The pound struggled against its peers on Wednesday as the UK currency continued to be plagued by Brexit uncertainty.
Sterling remains trading in a narrow range against most of its peers this morning, with GBP/EUR steady at €1.1211, GBP/USD flat at $1.2787 and GBP/CAD stable at C$1.6921, while GBP/AUD and GBP/NZD are attempting to rally from yesterday’s losses, rebounding to AU$1.7657 and NZ$1.8823 respectively.
Looking ahead to today, the publication of the Eurozone’s latest confidence figures appears to be the only release of note, with the euro likely to slip if consumer sentiment softens as expected…
What’s been happening?
The pound was left on the defensive against the majority of its currency peers yesterday, with investors remaining wary of GBP as Theresa May headed to Brussels to finalise the text on the UK’s future relationship with the EU.
Further denting the appeal of Sterling was the release of the UK’s latest public borrowing figures, which revealed the deficit had swelled in October.
Meanwhile driving movement in the GBP/EUR exchange rate lower yesterday was the European Commission’s final ruling on Italy’s 2019 budget.
While this saw the EC conclude that Rome has ‘seriously violated’ EU fiscal rules, opening the way for the Commission to move forward with disciplinary measures, expectations that Rome would ultimately be forced to reconcile allowed the euro to move higher.
However the GBP/USD exchange rate bucked the trend and remained steady on Thursday as a larger-than-expected contraction in US durable goods orders in October and renewed risk-appetite weighed on the US dollar.
What’s coming up?
Looking ahead, a lull in notable UK economic data for the remainder of the week is likely to see Brexit continue to dominate Sterling sentiment on Thursday.
We could see the pound fall against its peers if any other Brexit complications emerge ahead of the EU summit of leaders on Sunday.
Meanwhile the euro may relinquish some ground later this afternoon with the publication of the Eurozone’s latest confidence survey, with consumer sentiment forecast to have fallen in November due to Brexit and Italy uncertainty.
Finally investors are likely to find limited upsides to USD today as US markets close for the Thanksgiving holiday, leading to thin trade volumes in the US dollar.