Daily Currency Update
GBP - British PoundThe Pound has started the week on the back foot and where we finished off last week. This coming off the back of Friday after Michael Saunders, a hawkish member of the Bank of England, said that the BOE may have to cut rates even in case of a smooth Brexit as uncertainty has already taken its toll. The Conservative Party's annual conference kicked off in Manchester amid allegations that prime minister Boris Johnson groped a female journalist in 1999 and further calls to investigate Johnson's relations with an American entrepreneur when he was Mayor of London. The PM and the party continue insisting that the UK will leave the EU by October 31 without breaking the law -- the Benn Act which requires asking for an extension to Article 50. Opposition leaders meet today to discuss the next steps and ousting Johnson is one of the options. Some opposition leaders are reluctant to install Labour leader Jeremy Corbyn in Downing Street.This weeks fundamental calendar is a busy one for the UK. All the PMI’s, with Manufacturing kicking off on Tuesday. Todays we have final GDP q/q.
Key Movers
More bad news on the US-China trade war front where it was reported the Trump administration were discussing ways to limit US investors portfolio flows into China, the move would have repercussions for billions of dollars in investment pegged to major indexes. This news was quashed quite quickly, however, the official has said it will not happen "for now." The EUR/USD touched a near multi-year low of 1.0904 on Friday and local data didn’t do too much to help’s it cause, Import Prices fell sharply in Germany in August, while the EU Economic Sentiment Indicator fell to 101.7 in September, much worse than the 103.00 anticipated. The risk-off sentiment dominated Asia starting out a fresh week this Monday, as the traders were hurt by renewed US-China trade tensions after Friday’s report that Trump officials are weighing limits on US investors portfolio flows into China (as mentioned above). Amongst the G10 currencies, the Kiwi was the biggest loser and slipped to 0.6760 levels, hurt by a sharp fall in New Zealand’s ANZ Business Confidence data for September. The Aussie also struggled with its recovery and remained near three-week lows near 0.6750 despite upbeat Chinese Caixin Manufacturing PMI data.
Expected Ranges
- GBP/EUR: 1.1200 - 1.1280 ▼
- GBP/USD: 1.2280 - 1.2350 ▼
- GBP/AUD: 1.8160 - 1.8280 ▼
- GBP/NZD: 1.9520 - 1.9720 ▼