Daily Currency Update

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Trump trade offensive weighs in risk

GBP - British Pound

GBP/USD continues to hold around the 1.30 handle with no progress seen in cross party Brexit talks. The absence of any positive developments will continue to weigh on the pound and with little data due this week a slip below 1.30 is likely as the impasse drags on. Tomorrow's wage growth numbers will likely be the only driver for sterling this week however datas impact is currently somewhat blunted given politics hold on the pound.

Theresa May's future is another headwind for the quid as a definitive exit date has yet to be set, to the chagrin of her critics.

Friday saw UK GDP numbers come out as expected at 0.5% q/q however this upbeat figure was largely due to stockpiling by manufacturers ahead of the original intended Brexit date. It was interesting to note the latest monthly figure for Feb-March came out negative indicating the economy has now ground to a halt.

Key Movers

A deterioration in news emanating from the US/China trade talks is weighing on equities and commodities with the key barometer of risk, USD/JPY slipping back under the 110 handle. US President, Donald Trump raised tariffs on a range of Chinese goods from 10% to 25% as he stepped up pressure on the Chinese to try and resolve the issue.

The Aussie dollar is being hit hard by the disagreement with AUD/USD falling below .70 despite the Reserve Bank of Australia holding rates at 1.5% last week when a cut was expected.

Away from the China/US trade dispute, this week's big market movers will be US Retails Sales and Eurozone GDP figures both due on Wednesday.

Expected Ranges

GBP/USD: 1.2965 - 1.3085 ▼

GBP/EUR: 1.1510 - 1.1630 ▼

GBP/AUD: 1.8540 - 1.8720 ▲

GBP/NZD: 1.9660 - 1.9880 ▲

GBP/CAD: 1.7410 - 1.7590 ▲