GBP - British Pound
It was a bad start to the week for the pound with GBP/USD falling below 1.30 throughout yesterday afternoon as broad dollar strength and Brexit concerns weighed on sterling. There is growing unrest with PM Theresa May's leadership and her handling of the Brexit process with rumours abounding that Tories may look to change the guidelines over leadership challenges in an effort to bring one forward to the summer in order to oust the beleaguered PM. Having survived a vote of no confidence in December current rules state she cannot face another for 12 months however many members of her party want a commitment to quit by the summer regardless if she manages to get a withdrawal agreement passed with the EU and they may look to force the issue with new legislation. May's fragile position helped pull cable from around 1.30 to its current level of 1.2925 with further Brexit news likely to be the main driver of the pound. There was no positive news over ongoing cross-party talks from between Conservatives and Labour and the longer the news blackout remains, the harder it will be for the pound to recoup its recent losses. Data-wise we have UK Public Sector Net Borrowing numbers due this morning with a deficit for March of surplus of £800 expected. Its also been announced that the search for Bank of England Governor, Mark Carney's successor has been launched by the government with a new head needed by Jan 2020 when Carney's current contract expires.
Yesterday was dominated by broad dollar strength with trading pair weakness the main reason for its rise. The aforementioned GBP fragility helped push cable lower and the ongoing concerns over the health of the Eurozone, in particularly Germany, is adding downward pressure to EUR/USD. Today's main data-set of note is the monthly German IFO Business Climate survey with a reading of 99.9 predicted. The base reading of 100 is set to business conditions as of 2005 so we are below that level and way below the >115 prints we were seeing early last year highlighting how the EZ's biggest economy has slowed in the light of the China/US trade impasse.
Australian CPI numbers came in flat overnight for the first quarter raising calls for a rate cut from the Reserve Bank of Australia later this year. AUD/USD is heading back towards .70 on the back of this and the Kiwi has also been dragged lower as a result.
Today's main monetary policy decision comes from Canada with the BoC expected to keep interest rates at 1.75% although the message from bank chief, Stephen Poloz will be the main area of interest.
1.29 - 1.3020 ▼GBP/EUR:
1.1460 - 1.1580 ▼GBP/AUD:
1.8240 - 1.8410 ▲GBP/NZD:
1.9420 - 1.9565 ▲GBP/CAD:
1.7345 - 1.7470 ▲