GBP - British Pound
In the absence of any positive developments in cross party talks between Conservatives and Labour MPs GBP/USD has continued to fall away throughout the last 24 hours. After slipping below 1.30 late last week we have dipped below 1.29 overnight with the move exacerbated by broad dollar strength permeating the markets. There was relief of sorts for PM, Theresa May as proposed changes to the rules over how often a leader can face a vote of confidence were rebuffed by the Tory backbench 1922 committee so May cannot face another challenge via this route until December this year however the fact that changes were even discussed highlights the fragility of the PMs position. Sterling is likely to remain under pressure until a breakthrough is seen between the two sides with many Tories keen to get the matter sorted asap to avoid European elections having to be partaken in May.
Away from Brexit there was some soft data from the UK yesterday with Public Sector Net Borrowing missing target for March. An eyed surplus of £800m showed an £800m deficit instead.
Next week sees the quarterly Interest Rate Decision/Inflation Report from the Bank of England with no change in policy all but guaranteed but warnings over the damage a disorderly Brexit would have on the UK economy likely to be issued by BoE Governor, Mark Carney.
Despite sterlings woes, the current whipping boy of the world's major currencies is the euro with German economic woes weighing heavily on the shared currency. There has been a run of poor economic data of late from the manufacturing sector with a run of sub 50 PMIs indicating the damage the global slowdown is having on the country's exports. Yesterday's monthly IFO Business Climate Survey did little to lighten the mood, falling to 99.2 its fourth consecutive sub 100 print, the worst run since late 2010. EUR/USD is down to 1.1150, its lowest since June 2017, with a resolution in China/US trade talks badly needed to hopefully improve demand for German goods. GBP/EUR sits around 1.1560.
The Bank of Canada kept rates on hold as expected yesterday at 1.75% with Governor, Stephen Poloz saying rates were appopriate for the time being however a move lower could be needed should there be further poor economic data. USD/CAD popped through 1.35 on the news.
Its been a quiet few days from the States however top tier data starts this afternoon with Durable Goods orders due at lunchtime before this weeks' big event the first reading of first quarter growth from the US with an annualised 2.2% penciled in.
Italians are enjoying a day off for Liberation Day whilst the annual ANZAC day of remembrance means it will be a quiet end to the week for Australia and New Zealand.
1.2845 - 1.2980 ▼GBP/EUR:
1.1510 - 1.1620 ▲GBP/AUD:
1.8330 - 1.8510 ▲GBP/NZD:
1.9505 - 1.9655 ▲GBP/CAD:
1.7345 - 1.7510 ▲