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Volatility returns for the pound

GBP - British Pound

What a difference a few days can make in British politics. In the run up to the European elections on Thursday (and in the hope I'm sure to stem election loses) Prime Minister Theresa May took to the lectern yesterday to provide the country an update as to her Withdrawal Agreement 4.0. The pound which had suffered extensively over the last week or so was immediately buoyed upon the report that the Prime Minster was to offer MPs a vote on a second referendum however it soon transpired that this will only be offered if MPs pass her Withdrawal Agreement in the first place. At this point the pound slipped back towards its January lows. It would appear that May is trying to hold a gun to the heads of her colleagues however she forgot to load it. Indeed the fallout of yesterday's speech has already seen a number of prominent MPs announce they still won't vote for her deal, and why would they when very little has changed from Withdrawal Agreement 3.0. What is becoming more and more transparent is that the UK is heading down a road of increased uncertainty, and the downwards pressure on the pound will follow.

Key Movers

The market breathed a slight sigh of relief yesterday as the US announced that the Huawei ban would not come into affect for 90 days. In many ways this is vintage Trump; announce displeasure, implement tariffs, put things on pause. Overnight, the market will be reading between the lines when it comes to the release of the Federal Reserve's minutes from its May meeting, looking for any mention of growth vs. trade uncertainty. Meanwhile tomorrow in Europe, people will go to the polls for the European elections whilst a raft of EU data will be released.

Expected Ranges

GBP/USD: 1.2650 - 1.2780 ▼

GBP/EUR: 1.1325 - 1.1420 ▼

GBP/AUD: 1.8450 - 1.8560 ▼

GBP/NZD: 1.9460 - 1.9560 ▼

GBP/CAD: 1.6905 - 1.7080 ▼