Brexit remains front and centre
The pound traded in a wide range on Monday thanks to the latest Brexit headlines.
Sterling is facing some pressure this morning, with GBP/EUR muted at €1.1602, GBP/USD slipping to $1.2931, and GBP/CAD tumbling to C$1.6923. GBP/AUD and GBP/NZD have retreated to AU$1.8823 and NZ$2.0125 respectively.
Brexit will remain front and centre today, as MPs are due to vote on the legal part of Boris Johnson’s Brexit deal.
What’s been happening?
The pound fluctuated yesterday as Brexit developments continued dictating Sterling movement.
GBP exchange rates initially plummeted at the start of the week after a ‘meaningful’ vote on Boris Johnson’s Brexit deal failed to go ahead as planned on Saturday.
However the pound was quick to rebound, with GBP/USD even briefly breaking through $1.30, in spite of Johnson’s attempts to hold a yes/no vote on his deal being quashed by speaker John Bercow.
Meanwhile, the euro was left on the back foot on Monday after the Bundesbank (Germany’s central bank) warned that Europe’s largest economy is at significant risk of slipping into a recession in the third quarter.
The US dollar also came under pressure yesterday as a risk-on mood prevailed, leaving investors shunning the safe-haven USD.
This bump in risk appetite came as a result of positive US-China trade headlines, with Beijing reporting ‘substantial progress’ had been made in talks.
What’s coming up?
Brexit will remain in focus this morning as MPs prepare to vote on Johnson’s Withdrawal Agreement Bill.
This is the legislation that will need to pass to actually allow the UK to leave the EU and Johnson will be seeking to rush it through parliament to ensure that the 31 October deadline is not missed.
However, the bill may be subject to amendments, with GBP investors particularly focused on whether there is support for a confirmatory referendum.
For EUR investors the focus will remain on Germany today, with a speech by the Bundesbank’s Sabine Mauderers potentially exerting some pressure on the euro if she suggests the German economy may be facing a prolonged slowdown.
In the absence of any notable US data, the US dollar may remain on the defensive today if US-China optimism continues to buoy market risk appetite.
We’re here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers.
P-O Life receives a small commission from Currencies Direct when readers use them for their money exchange. This goes towards maintenance and upkeep of the site, not on beer and wine as those who know me might suspect! 🙂 Thanks for your support.