After reaching multi-week highs against the majority of its peers during the middle of last week the Pound (GBP) began to trend lower again on Friday as markets became increasingly jittery ahead of today’s Brexit deadline.
Theresa May will meet with European Commission president, Jean-Claude Juncker in Brussels later today to discuss Brexit, with May’s meeting coming as the end of the deadline set by president of the European Council, Donald Tusk for the UK to offer satisfactory terms for leaving the EU.
The Pound Euro (GBP EUR) exchange rate fell back slightly from a two-month high at the end of last week’s session on fears that the UK may fail to meet today’s deadline.
Meanwhile the Euro was strengthened last Friday by last month’s final manufacturing PMI reading for Germany, which confirmed that German factory activity reached a new six-year high in November.
However the single currency may relinquish some of these gains later in today’s session if the Eurozone PPI figures slip in October as expected.
Sterling has fallen back almost a cent again the US Dollar (USD) from the highs struck last week as the ‘Greenback’ was lifted by the passing of Trump’s long awaited tax bill on Saturday.
After weeks of back and forth the Senate finally approved Trump’s tax reforms over the weekend, granting the President the power to sign off on substantial tax cuts that investors hope will bolster growth in the US economy.
However the US Dollar’s gains have been undermined slightly by political movements in Washington, with the news that Michael Flynn had pleaded guilty in the FBI investigation into Russian interference in last year’s election shaking confidence in the administration.
The Pound Canadian Dollar (GBP CAD) exchange rate plummeted by around three cents during the US session on Friday as the ‘Loonie’ surged following the releases of Canada’s latest employment figures. Which revealed that the jobless rate fell to just 5.9% in November, the lowest rate of unemployment since early 2008.
After climbing to its highest levels since the Brexit vote against the Australian Dollar (AUD) on Thursday, Sterling beat a hasty retreat on Friday as rising commodity prices and a bout of profit taking pulled the rug out from underneath the currency.
New Zealand Dollar
The Pound New Zealand Dollar (GBP NZD) exchange rate painted a similar picture to GBP AUD at the end of last week, falling from a multi-month high as rising commodity prices helped the ‘Kiwi’ to exploit the weakness in Sterling.
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.
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