The pound sought to consolidate its position yesterday, holding its ground as market waited for Theresa May to return from her latest trip to Brussels.
Sterling remains steady this morning, with GBP/EUR subdued at €1.1426, GBP/USD flat at $1.2931 and GBP/CAD muted at C$1.7136, while GBP/AUD and GBP/NZD both drift higher, striking AU$1.8158 and NZ$1.8922 respectively.
In the spotlight today will be the UK’s latest employment data, with the pound poised to rise if wage growth accelerated as forecast in December…
What’s been happening?
The pound opened this week’s session on a stable footing, consolidating Friday’s gains as GBP investor appeared upbeat ahead of Theresa May latest trip to Brussels in an effort to win concessions from the EU over the Irish backstop.
This saw GBP investors largely overlook the other major development in UK politics yesterday as 7 MPs announced their split from the UK Labour Party.
The euro, meanwhile, faced some pressure on Monday as reports emerged that the US Department of Commerce was looking at the EU auto industry and whether it could be a national security threat. Fears of possible tariffs buoyed the GBP/EUR exchange rate.
Meanwhile, the GBP/USD exchange rate was able to make some tentative gains at the start of the week after the closure of US markets for Presidents Day lead to thin trade in the US dollar.
What’s coming up?
Looking ahead, GBP investors will be focused on the release of the UK’s latest labour figures today.
Economists forecast UK unemployment will have held at a 43-year low in December.
However it’s likely to be the accompanying wage figures that are the centre of attention this morning, with the pound poised to rally if wage growth continued to accelerate as forecast.
Meanwhile, the euro could come under pressure this morning if the latest ZEW survey reveals that economic sentiment in the Eurozone remained gloomy this month.
Finally, potentially impacting the US dollar this afternoon will be a speech from the Federal Reserve’s Loretta J. Mester, with USD sentiment potentially softening if the policymaker remains dovish in her outlook for the US economy.
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