Euro slides on German manufacturing contraction, Supreme Court ruling ahead
Philip McHugh September 24th 2019 - 2 minute read
While the pound continued edging away from its recent highs on Monday, the euro also struggled as Germany’s latest manufacturing PMI provided cause for concern.
The pound is trading statically this morning, with GBP/EUR steady at €1.1303, GBP/USD holding $1.2426, and GBP/CAD fluctuating around C$1.6481. GBP/AUD and GBP/NZD are trading in the region of AU$1.8326 and NZ$1.9733 respectively.
Brexit and politics remain in focus for the UK today, but the German IFO reports could cause further euro movement.
What’s been happening?
The pound had a difficult start to the week, with the currency edging lower against many of the major currencies as hopes for a Brexit breakthrough remained limited.
Low expectations that Boris Johnson will be able to progress a deal during his visit to the UN kept the pound under pressure, as did speculation about the Supreme Court’s ruling on the prorogation of parliament.
The euro, meanwhile, slid as Germany’s manufacturing PMI edged from 41.4 to 43.5 – moving further below the 50 mark separating growth from contraction.
The US dollar also struggled to exert itself despite an uptick in the Chicago Fed national activity index.
What’s coming up?
The Supreme Court is due to deliver its verdict on whether Boris Johnson’s decision to suspend parliament was lawful later today, and the outcome could trigger GBP volatility.
According to the BBC, when asked whether he would resign if the court ruling went against him, Boris Johnson replied: ‘Let us see what the justices say. I’m going to wait and see what the judgement is. And I want to stress that this is a government that fully respects the law and fully respects the judiciary.’
Elsewhere, the euro will be reacting to the latest German IFO business confidence and expectations indexes. Further signs of German economic weakness would be euro-negative.
The US dollar, meanwhile, will be responding to the US house price and consumer confidence indexes. Economists have forecast a weakening in consumer sentiment in September.