Daily Currency Update
GBP - British PoundIn what was a quiet economic calendar on Monday, Sterling losses were not as dramatic compared to what we have seen of late. The Pound bounced back after falling to a ten-year low against the Euro last week, despite the UK think tank Institute for Government (IfG) saying that MPs would be unlikely to prevent a no-deal Brexit on October 31. Joe Owen, the Brexit Program Director for IfG, commented: ‘MPs looking to force the government into a change of approach face a huge challenge when parliament returns… Even if they can assemble a majority for something, they may find few opportunities to make their move – and time is running out. In additional headlines, UK PM Johnson is planning a trip to Berlin and Paris to deliver Brexit demands and he also spoke to US President Trump yesterday, discussing global economic issues & trade.News over the last few day is that some British lawmakers are plotting a way to try and de-rail Boris Johnson’s attempt to crash out with or without a deal come October 31st, some seeking a further extension and an idea that could lift sterling, short term anyway. Confirmation from the Guardian mentioned that September 09 is the date on which the parliamentary battle to stop the PM from exiting the EU without deal will begin.Jitters will return today with latest publication of the ILO unemployment rate figure for June, which is expected to remain at 3.8%. Meanwhile, UK average earnings are expected to improve, rising from 3.4% to 3.7%. Cable is already on the backfoot on market open this morning dropping to a low of 1.2043 and GBP/EUR has followed suit, dropping to a low of 1.0761.
Key Movers
It was turmoil in Hong Kong as protestors in the airport caused all flights to be cancelled. This coupled with the escalating US-China trade war caused a risk-off sentiment overnight with most major currencies dropping, and only the safe-haven JPY and CHF outperforming. Italian political uncertainty has also weighed on market sentiment in the European currency, following comments from Italy’s Deputy Prime Minister Matteo Salvini, a known Eurosceptic, who called for a snap election over the weekend. This has heightened fears that the Italy could proceed with its own ‘Brexit’ should Mr Salvini secure a majority.
Expected Ranges
- GBP/USD: 1.2040 - 1.2100 ▲
- GBP/AUD: 1.7730 - 1.7920 ▲
- GBP/NZD: 1.8660 - 1.8790 ▲