Pound exchange rates steady as PM hails Brexit ‘progress’

Philip McHugh February 21st 2019 - 2 minute read

The pound traded in a narrow range against most rivals yesterday as Theresa May hailed ‘progress’ in Brexit talks with the EU.

Sterling is buoyed this morning however, with GBP/EUR stable at €1.1510, GBP/USD steady at $1.3074 and GBP/CAD edging higher to C$1.7241. Meanwhile both GBP/AUD and GBP/NZD have surged, striking AU$1.8391 and NZ$1.9164 respectively.

In the spotlight today will be the release of the Eurozone’s latest PMI figures, with the euro poised to weaken if growth in the bloc continued to slow in February.

What’s been happening?

The pound traded in a neutral range on Wednesday as Theresa May met with European Commission President Jean-Claude Juncker in Brussels to discuss the Irish backstop.
 
The PM was upbeat following the talks as she suggested that ‘progress’ had been made regarding potential changes to the withdrawal agreement, but admitted that ‘time is of the essence’ if the UK is to avoid a no-deal Brexit.

The GBP/EUR exchange rate was mostly subdued during the European session yesterday, with the euro being buoyed early in the session after Germany’s latest PPI figures came in surprisingly strong in January, helping to dampen fears of a slowdown in the Eurozone’s largest economy.

Meanwhile, the GBP/USD exchange rate fluctuated yesterday evening following the publication of minutes from the FOMC’s January policy meeting, after they indicated that the Federal Reserve may not be done with rate hikes just yet.

What’s coming up?

Looking ahead, the main focus for markets today will be the release of the Eurozone’s latest PMI figures.

This morning’s figures are expected to report that growth in the bloc’s private sector will have drifted closer to stagnation in February, likely exacerbating fears that parts of the Eurozone may fall into recession in 2019.

Meanwhile, the US dollar may find some support later this afternoon, with forecasts that domestic goods orders will have continued to strengthen in December, indicating that US economic activity remained relatively robust at the end of 2018.

Finally, barring any further developments in Brexit, the pound could look to push higher this morning on the back of the UK’s latest public borrowing figures, with analysts expecting a sizable surplus in January on the back of strong self-assessed tax returns.
 

Written by
Philip McHugh

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