Pound dips as Johnson calls for a general election

Philip McHugh September 26th 2019 - 1 minute read

  • Pound down on political uncertainty
  • US dollar shakes off political turmoil
  • Oil price decline not enough to dent Canadian dollar

 
Pound under pressure as parliament resumes

The pound edged lower yesterday as parliament reconvened and PM Boris Johnson challenged opposition MPs to call a confidence vote in his government.
 
According to The Independent, Johnson accused MPs of ‚Äúpolitical cowardice‚ÄĚ and demanded parliament ‚Äústep aside‚ÄĚ so he could deliver Brexit.
 
Political developments are likely to keep Sterling under pressure as we head towards the weekend.
 
 
Widening goods trade deficit set to dent US dollar
 
An increasing sense of political turmoil failed to weigh on the US dollar yesterday after House Democrats opened a formal impeachment investigation.
 
With market risk appetite fading in the face of the news USD exchange rates experienced fresh gains, also benefitting from positive home sales data.
 
However, support for the US dollar could fade this afternoon as forecasts point towards a widening of the advance goods trade deficit.
 
 
Canadian dollar could gain if businesses prove optimistic 
 
The Canadian dollar shook off a decline in oil prices on Wednesday, in spite of US crude oil inventories showing a surprise increase.
 
CAD exchange rates could find a stronger footing today if the CFIB business barometer offers a positive signal.
 
Signs of resilience within the Canadian economy would give the Bank of Canada (BOC) greater incentive to leave interest rates on hold, to the benefit of the Canadian dollar.
 
As long as the index shows another solid month of business sentiment the potential for CAD exchange rate losses could prove limited. 
 
Upcoming Data:
 
Thursday, 26th September 2019
13:30 CAD CFIB Business Barometer
13:30 USD Advance Goods Trade Balance
23:00 NZD ANZ Roy Morgan Consumer Confidence Index
 

Written by
Philip McHugh

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