Daily Currency Update

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Parliament returns with a bang

GBP - British Pound

Parliament returns from their Summer recess today and its certainly been an eventful summer. Yesterday Prime Minister Boris Johnson announced outside Downing Street that if he lost today's crucial vote on a No Deal Brexit bought forward by the Labour MP Hilary Benn then he would call a general election for October 14th. The threat of a general election has driven the pound lower and this morning it has dropped to its lowest level since a flash crash in 2016. The previous barrier between a hard Brexit vs soft Brexit was GBP/USD 1.30 is now a million miles away and now the new barrier between a general election and extension seems to be 1.20.

Away from this, UK manufacturing numbers showed the steepest decline in output in over 7 years as concerns over Brexit and the global slowdown begin to take effect. The UK economy showed negative growth of 0.2% last quarter and these awful PMI numbers could weigh on growth for this quarter as well dragging the UK into a technical recession.

Key Movers

If things were poor in the UK there's an argument to suggest the state of the Eurozone's economy is even more concerning. European factories shrunk for the seventh month in the row with Germany in particular suffering due to the drop in demand in cars and machinery. Indeed it was Germany that dragged the rest of Europe down.

The US market is back from Labor Day today with ISM Manufacturing numbers set to be released.

Expected Ranges

GBP/USD: 1.1815 - 1.2150 ▼

GBP/EUR: 1.0820 - 1.1120 ▼

GBP/AUD: 1.7890 - 1.8075 ▼

GBP/NZD: 1.8950 - 1.9050 ▼