Daily Currency Update
GBP - British PoundYesterday investors dipped their toes back into riskier assets due to a plethora of factors, welcome news for many. However, this buoyed sentiment wont' be shared by Prime Minister Boris Johnson who off the back of his first defeat suffered 3 more. By my count Johnson's record stands at 0-4. If he were a football league team, he'd be Scunthorpe United, who are yet to win a game this season. So what next? Hilary Benn's bill to stop a No Deal Brexit is likely to come into law by Friday and at that point the market is expecting the opposition to back a general election which is inevitable given Johnson has no working majority in Parliament. Having been defeated yesterday, Johnson tried to call a snap general election however the opposition stalled, waiting for their extension bill to receive royal assent. Looking forward, once an election is confirmed the pound will be hoping that one party manages to secure a large enough majority and mandate to gently manage the UK out of the EU. A Conservative/Brexit party coalition may not be the most popular option for investors.
Key Movers
The risk sentiment, as mentioned earlier was mainly supported by the news that China and the US have agreed to meet in early October for a fresh round of negotiations. As such equities in Asia and the US traded slightly higher, whilst the US Dollar was on the back foot against most emerging market currencies. The Bank of Canada, who met yesterday, left their interest rates unchanged however the Canadian dollar managed to gain against its US counterpart as Governor Poloz still remains uncommitted in the eyes of many about cutting interest rates in October. Finally, ISM non-manufacturing data is released this afternoon in the US which is expected to disappoint once again. Manufacturing data earlier in the week proceeded this on Tuesday and came in under par driving GBP/USD in the afternoon session.
Expected Ranges
- GBP/USD: 1.1960 - 1.2290 ▲
- GBP/EUR: 1.0960 - 1.1140 ▲
- GBP/AUD: 1.7890 - 1.8180 ▲
- GBP/NZD: 1.9150 - 1.9290 ▲