Pound broadly softens, Brexit discussions in focus
Philip McHugh September 27th 2019 - < 1 minute read
Ongoing political anxiety left the pound struggling yesterday.
Sterling has fallen further this morning, with GBP/EUR down to €1.1247, GBP/USD dipping to $1.2281 and GBP/CAD hitting C$1.6295. GBP/AUD and GBP/NZD are also on the backfoot, down to AU$1.8179 and NZ$1.9523 respectively.
What’s been happening?
The pound broadly weakened yesterday as PM Boris Johnson resisted calls for his resignation and general election speculation intensified.
With the outlook so uncertain Sterling was unable to benefit from a modest improvement in the UK consumer confidence index.
The GfK measure of consumer sentiment rose from -14 to -12.
Meanwhile, the euro was also feeling the pressure yesterday as European Central Bank (ECB) policymaker Sabine Lautenschläger resigned.
Lautenschläger was one of the central bank’s more hawkish policymakers so her early departure raised the odds of further easing.
Over in the US, the dollar dipped slightly as signs of progress in US-China trade negotiations reduced demand for safe-haven currencies.
What’s coming up?
While UK data is lacking today, the pound could experience a final flurry of movement before the weekend as UK Brexit Secretary Stephen Barclay meets with EU chief negotiator Michel Barnier to discuss how to move negotiations forward.
According to the latest reports, the two sides are still some way off resolving the Irish backstop issue. If headlines remain negative the pound’s current downtrend is likely to continue heading into the weekend.
Elsewhere, the euro could come under pressure later this morning if a series of Eurozone confidence indexes show a decline in sentiment.
The US dollar, meanwhile, will be motivated by the latest domestic durable goods orders figures.
An increase in core orders could prove USD-supportive. The US University of Michigan consumer confidence index is also expected to show a slight improvement, rising from 92.0 to 92.1.