Efforts to block no-deal Brexit boost GBP
Currencies Direct August 28th 2019 - 2 minute read
- Pound trends higher on Brexit news
- Euro weakened by ECB speculation
- Declining US confidence weighs on dollar
Pound exchange rates rise as UK opposition parties meet
The pound (GBP) broadly strengthened yesterday as UK opposition parties met to discuss plans to prevent a no-deal Brexit. The talks were led by Labour leader Jeremy Corbyn.
MPs also discussed the option of a vote of no-confidence in Boris Johnson if attempts to block no-deal prove unsuccessful.
With UK data lacking Brexit will continue driving pound movement for the rest of the week.
Euro struggles ahead of ECB meeting
European Central Bank (ECB) Vice President Luis de Guindos suggested yesterday that interest rates are going to remain low for a long time. He also stated that the ‘ECB has to act with determination’ in regards to the use of negative rates.
The remarks left the euro struggling, and the common currency is likely to remain under pressure until the ECB gathers in September and announces its policy decision.
German confidence data and the deadline for Italian coalition talks could stoke euro volatility today. If talks between the Democratic Party and Five-Star movement fail to lead to the creation of a new government Italy faces the prospect of snap elections.
US consumer confidence dips, US dollar weakens
The US dollar came under pressure yesterday as US consumer confidence dipped in August.
USD exchange rates were also adversely affected by concerns that the US and China won’t be able to resolve their trade dispute in the near future.
US dollar movement could be sparked by today’s domestic mortgage data and a speech from the Federal Reserve’s Thomas Barkin.
Hints that rates could be cut again in September would be USD-negative.
29 August 2019
07:00 EUR German GfK Consumer Confidence (SEP)
12:00 USD MBA Mortgage Applications