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Pound steady amid Brexit uncertainty and BoE concerns

currency-newsPound steady amid Brexit uncertainty and BoE concerns
The pound trended slightly higher yesterday as markets appeared to shrug off concerns about Brexit and the Bank of England (BoE).

Sterling is trading flatly this morning however, with GBP/EUR rangebound at €1.1748, GBP/USD muted at $1.3084, and GBP/CAD subdued at C$1.7054, while GBP/AUD and GBP/NZD hold steady at AU$1.8941 and NZ$1.9680 respectively.

Coming up, will an upbeat UK retail sales reading help to bolster GBP exchange rates today?

What’s been happening?

The pound ticked higher on Thursday, despite GBP investors wrestling with Brexit uncertainty and Bank of England rate cut speculation.

In regards to Brexit, markets fear the EU is preparing to take a hardline stance in trade negotiations with the UK.

Brussels is thought to be pushing for any future deal with the UK to be based on ‘dynamic alignment’ to ensure a ‘level-playing’ field on regulation.

Also failing to supress GBP exchange rates was ongoing speculation the BoE could cut interest rates later this month as the odds of an immediate cut climbed above 60%.

The euro was muted yesterday as markets responded to the minutes from the European Central Bank’s (ECB) latest policy meeting.

These revealed that ECB policy makers are becoming more positive on inflation, but remain cautious about the Eurozone economy as a whole.

Meanwhile, the US dollar found some most support on the back of upbeat retail sales data and the Philadelphia manufacturing index, but upside in the US currency was capped by ongoing concerns regarding the recently signed US-China trade deal.

What’s coming up?

Looking ahead, the UK’s retail sales figures will be top of the agenda today.

This is likely to strengthen the pound as economists forecast this morning’s data will show a sharp rebound in sales growth last month thanks to the late timing of Black Friday leading the sale event to be included in December’s data.

For EUR investors the focus will be on the final release of the Eurozone’s consumer price index, which is expected to confirm that inflation in the bloc accelerated to a six-month high in December.

Finally, the publication of the latest US industrial production figures may exert some pressure on the US dollar later this afternoon, with analysts predicting factory output will have contracted in December.
 
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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