The Pound (GBP) continued to downtrend against the majority of its peers this morning, reaching new multi-month lows as markets remain worried about the political landscape in the UK.
With the Queen’s Speech set to outline the government’s legislative plans for the next two years later today, Theresa May is still yet to reach a formal agreement with the DUP to support her party in a minority government, causing some investors to fear that she may not be able to offer the stability she promised.
However, the Pound was able to claw back some of its losses as the ONS reported that the UK public deficit fell more than expected in May.
The Pound Euro (GBP EUR) exchange rate slipped to a new weekly low this morning over concerns over the UK government’s position going into Brexit negotiations.
However the single currency’s advance was also slowed by the release of Spain’s latest Industrial Orders data, which showed that orders slid from 10.8% to 9.5% in April.
The Euro is likely to strengthen again tomorrow however with the release of the Eurozone’s latest Consumer Confidence figure, which is expected to show that sentiment is improving as the bloc continues to show solid growth.
Sterling softened against the US Dollar (USD) this morning as Theresa May’s failure to reach an agreement with the DUP appeared to cast doubts over her ability to negotiate in Brexit talks.
The fall comes after the pairing stabilised last night as the ‘Greenback’ was weakened by a dovish speech from Dallas Federal Reserve President, Robert Kaplan in which he said he would keep an ‘open mind’ towards a third rate hike this year.
The US dollar may be forced to cede some ground later this afternoon however as analysts forecast that US Existing Home Sales will have fallen slightly in May.
The Pound Canadian Dollar (GBP CAD) exchange rate rallied after a brief drop this morning as the ‘Loonie’ was punished by yet another fall in oil prices as fears mount over a global supply glut, causing Brent crude to slump below $46 a barrel, a new seven-month low.
The Pound slipped by around half a cent from its best levels against the Australian Dollar (AUD) this morning as political concerns in the UK weighed on market sentiment.
New Zealand Dollar
Despite beginning to recover overnight on Tuesday as the New Zealand Dollar (NZD) was weakened by a drop in dairy prices, GBP NZD tumbled to a new three-month low at the start of the European session today as the UK’s political landscape remained unclear to investors.
This week the US Dollar was touching three-year highs when valued against a basket of major currencies. The greenback’s traditional role as one of the safe-haven currencies is helped by a domestic economy that is largely immune to the threats of the coronavirus.
Last update: 22 Feb, 2020
The strong start to the year for “risk-on” currencies is already a distant memory.
Posted: 3 Feb, 2020
The threat of a proxy war between the US and Iran in Iraq has pared back some of the recent gains of “risk-on” currencies.
Last update: 8 Jan, 2020