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Pound recovers ground after MPs reject Brexit deal

business-articlesPound recovers ground after MPs reject Brexit deal
  • Pound strengthens in spite of Brexit deal rejection
  • Weaker Eurozone industrial production may dent euro
  • US dollar vulnerable ahead of durable goods orders
Pound shrugs off Parliament’s rejection of Brexit deal
The pound returned to a stronger footing this morning, in spite of MPs voting down Theresa May’s revised Brexit proposal.
As markets are confident that Parliament will also vote against leaving the EU without a deal later today this helped to support GBP exchange rates.
However, with a mutually agreeable Brexit deal proving elusive any delay to the departure deadline could simply prolong the sense of uncertainty.
Unless investors see hope of a successful resolution to the Irish border issue this is likely to prompt the pound to return to a negative bias in the days ahead.
Euro vulnerable to falling Eurozone industrial production
Demand for the euro could diminish this morning if the Eurozone industrial production data falls short of forecast.
Following on the heels of underwhelming German production figures investors are wary of another contraction in output on the year.
Fresh signs of a slowdown within the Eurozone manufacturing sector would expose EUR exchange rates to selling pressure, with confidence in the economic outlook already limited.
On the other hand, a stronger showing from the industrial sector may offer the euro a solid boost against its rivals today.
Weaker durable goods orders to add to US dollar losses
In the wake of yesterday’s disappointing US consumer price index data the mood towards the US dollar looks set to remain muted.
Forecasts point towards US durable goods orders contracting on the month in January, underlining market worries over the outlook of the world’s largest economy.
With a new US-China trade agreement showing no signs of materialising in the near future any signs of a slowdown in the US economy could weigh heavily on USD exchange rates.
If consumers show greater signs of confidence, however, this could encourage the US dollar to recover some of its lost ground today.
Upcoming Data:
Wednesday, 13th March 2019

10:00 EUR Eurozone Industrial Production
12:30 USD Durable Goods Orders
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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