The Pound (GBP) nosedived at the start of the week’s session, as mounting political pressure on Theresa May and reports of a possible leadership contest shook market confidence in the UK currency.
However Sterling began to claw back some of its losses by the afternoon as it became clear that Tory MP’s were reluctant to oust the Prime Minister at a time when Labour is surging in the polls.
Meanwhile the Pound may find itself tumbling again later today, with the release of the UK’s latest CPI figures as the Bank of England’s (BoE) recent vote to raise interest rates may leave markets less welcoming of another rise in inflation.
The Pound Euro (GBP EUR) exchange rate slumped yet again this morning although this time being driven lower by some impressive economic data from the Eurozone.
Germany’s latest GDP estimate revealed today that Europe’s largest economy expanded at a blistering pace in the third quarter, as growth jumped to 0.8%, flying past expectations that growth would hold at 0.6%.
The stronger than expected reading may also help to bump up the latest Eurozone GDP estimate when it is released later this morning, with the single currency likely to surge again if growth in the bloc beats expectations.
Sterling was able to rally by around half a cent against the US Dollar (USD) from its worst levels on Monday as political uncertainty in the UK began to fade.
However the pairing’s struggled to push any higher with the ‘Greenback’ stabilising in advance of some important US economic data later this week, the most notable of which be tomorrow’s inflation data, with an expected drop in inflation likely to pin back hopes for further rate hikes from the Federal Reserve next year.
After initially tumbling yesterday the Pound Canadian Dollar (GBP CAD) exchange rate was able to recoup the majority of its losses overnight as a dip in oil prices helped to support Sterling’s recovery.
While Sterling was able to mount a recovery against the Australian Dollar (AUD) late on Monday the pairing’s gains proved to be short lived overnight as a surprise uptick in Australia’s latest business confidence index helped to lift the ‘Aussie’.
New Zealand Dollar
The Pound New Zealand Dollar (GBP NZD) exchange rate’s recovery meanwhile appears to be holding this morning as weak commodity prices weigh heavily on the ‘kiwi’.
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