Pounds looks for fresh start after disastrous last two weeks

Philip McHugh May 28th 2019 - 2 minute read

With Theresa May announcing her resignation last Friday, pound investors are hoping this will score a line under the recent Brexit volatility that saw the UK currency fall for 14 consecutive days on markets.

Sterling starts off the week on a slightly weaker footing, with GBP/EUR flat at €1.1336, GBP/USD down a tad at $1.2673 and GBP/CAD unmoved at C$1.7036, while GBP/AUD falls to AU$1.8305 and GBP/NZD slumps to NZ$1.9331.

Coming up today will be the release of the UK Inflation Report Hearings, which have the potential to affect Sterling exchange rates, but otherwise it is a quiet day on the data front.

What’s been happening?

The end of last week was dominated by Theresa May’s announcement of her resignation, with the date of 7 June being set for her departure.

The news in itself was widely expected and already priced in, although Sterling did rise modestly across the board as the confirmation came in.

Meanwhile some flat UK retail sales figures were overshadowed by a poor Distributive Trades Survey from the CBI, which revealed a -27% fall in May, indicating the next retail sales figures could be markedly worse.

The ramifications of the EU parliamentary elections are likely to still be felt throughout this week as markets assess the new risk landscape for the euro in the wake of the results which saw the status quo shaken to its core.

What’s coming up?

With political news still likely to play a major role in currency movements this week, investors will likely be paying more attention to headlines involving Brexit, the EU elections and whatever Donald Trump and China may say about US-China trade.

Later this morning we’ll get to see the latest Eurozone business climate figures, which are expected to improve.
This will then be followed by US consumer confidence stats this afternoon, which could cause sentiment in USD to soften if they disappoint. 

Written by
Philip McHugh

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