Home Daily Commentaries Sterling continues to struggle

Sterling continues to struggle

Daily Currency Update

GBP - British PoundThe pound has continued its poor run of form over the last 24 hours, dropping over a cent against most of its major counterparts.This was despite UK unemployment dropping to its lowest level since 1975 in the three months to October, according to figures released by the office for national statistics yesterday.The reduction in unemployment was somewhat overshadowed by stalling wage growth over the same period and the number of job vacancies also shrinking, so the data ultimately failed to lift a stalling pound.It appears then that political sentiment will continue to be the biggest influence on the pound’s performance over the coming weeks and months. Boris Johnson's intention to remove the legal option to extend the transition period past the end of 2020 leaves him just a year to negotiate a trade agreement with the EU, creating fresh concerns around a no deal Brexit - the last EU trade agreement (with South Korea) took four years to negotiate.UK CPI figures are released at 09.30am this morning, and with expectations that inflation will drop from 1.5% to 1.4% this could serve to put more pressure on the pound.

Key Movers

We have a busy day of data in the Eurozone today. German IFO numbers for December released at 9am saw an increase to the index and came in slightly above expectations at 96.3 which seemed to give the EUR a slight lift.We have Eurozone CPI data released at 10am – no significant changes expected on last months figures, but a weak number could put pressure on the EUR.Elsewhere, we have Canadian CPI data released at 13.30 and there is little data to drive the USD today.

Expected Ranges

  • GBP/USD: 1.3050 - 1.3150 ▼
  • GBP/EUR: 1.1750 - 1.1820 ▼
  • GBP/AUD: 1.9100 - 1.9180 ▼