Pound takes a breather following Brexit delay vote

Philip McHugh March 15th 2019 - 2 minute read

Outside a few blips, the pound steadied on Thursday as MPs backed a delay to Brexit, as had been widely expected.

Sterling appears to have been hit by some profit taking this morning however, with GBP/EUR dipping to €1.1683, GBP/USD slipping to $1.3237 and GBP/CAD stumbling to C$1.7600, while GBP/AUD and GBP/NZD both tumble, striking AU$1.8672 and NZ$1.9312 respectively.

Looking ahead, we may finally get a brief respite from Brexit today, with the focus potentially turning to the US dollar and the release of the latest US industrial production figures.

What’s been happening?

The pound stabilised on Thursday, but remains on course for its best weekly performance since January after MPs voted to delay Brexit beyond 29 March.

While the news was welcomed by GBP investors it provided limited upside to Sterling, with the delay having been priced in earlier in the week.

Ahead of the vote, trade in the GBP/EUR exchange rate was mixed yesterday, with the euro struggling to find support as Germany’s final inflation figures fell short of a preliminary reading in February.

Meanwhile, the GBP/USD exchange rate found itself edging lower at points in yesterday’s session as some disappointing Chinese data renewed concerns over a slowdown in global growth driving skittish investors toward the safe-haven US dollar.

What’s coming up?

The highlight of today’s data calendar looks set to be the latest US industrial production figures, which may help to bolster the US dollar if factory output recovered in line with expectations February.

Also in focus for USD investors will be the latest Michigan consumer sentiment index, which could limit any upside in the US dollar if the latest survey shows that respondents remained broadly pessimistic in March.

Meanwhile, the Eurozone will publish its final CPI reading for February this morning, which could undermine the euro if inflation in the bloc also falls short of expectations.

Finally, while there are no further votes on the docket this week, expect to see any movement in Sterling to continue to be dominated by Brexit sentiment, with GBP investors likely to spend Friday’s session speculating on what this week’s developments mean for the pound.

Written by
Philip McHugh

Select a topic: