Compare exchange rates, send money abroad and online

Mon 15 Jul 2024 09:17GMT

Sterling (GBP) Losses Limited as Investors Continue to Hope for Brexit Developments

Published: 6 Dec at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Ireland,

Pound Sterling (GBP)
Demand for the Pound has been anything but firm in recent sessions. The British currency has seen wide fluctuations since a deal on the Brexit divorce proceedings was blocked by the Northern Ireland DUP Party on Monday.

With the issue of the border between Ireland and Northern Ireland still causing contention in negotiations, investors have been hesitant to buy into the Pound. However, markets remain hopeful that a deal will be agreed in the next week and this is limiting the Pound’s losses.

Recent UK data has been unable to support the Pound, but overall Sterling is unlikely to see a big shift in direction until a Brexit deal is either reached or the 14th of December EU summit deadline passes.

Euro (EUR)
The Pound to Euro exchange rate continued its volatile fluctuations on Wednesday, generally trending closely to the week’s opening levels.

While the Pound’s strength has been limited by uncertainty surrounding Brexit concerns, the Euro has not seen any fresh support on Eurozone data. Tuesday’s Eurozone retail sales stats failed to meet expectations which has weighed on the shared currency.

Thursday’s Eurozone Gross Domestic Product (GDP) projections could give the Euro stronger support for the remainder of the week if they impress.

US Dollar (USD)
The Pound to US Dollar exchange rate has been unable to hold its ground in recent sessions and has been tumbling since Tuesday due to market hopes on US tax reform.

The US Republican tax bill has overcome notable obstacles in the last week and markets are becoming more confident that the bill will pass through Congress and offer a boost to corporations.

On top of this, the US Dollar was also supported on Wednesday by a solid employment change report from ADP. ADP’s November employment change report was forecast to come in at 185k, but instead printed at 190k.

Australian Dollar (AUD)
The Pound to Australian Dollar exchange rate dipped on Wednesday, but market concerns about Australia’s economic outlook weighed on the ‘Aussie’ and helped GBP/AUD to limit its losses.

Wednesday’s Asian session saw the publication of Australia’s Q3 Gross Domestic Product (GDP) results, which failed to meet expectations in both major prints.

This worsened concerns that Australia’s economic outlook wasn’t as strong as previously thought and this could weigh on the chances of the Reserve Bank of Australia (RBA) taking a more hawkish tone on monetary policy any time soon.

New Zealand Dollar (NZD)
The Pound to New Zealand Dollar exchange rate tumbled on Wednesday. While the pair has held away from its worst levels it currently trends well below the week’s opening levels.

Tuesday’s news that dairy prices were recovering, as well as lower demand for the Australian Dollar, have left the New Zealand Dollar more appealing. This has kept pressure on GBP/NZD this week.

Canadian Dollar (CAD)
The Pound to Canadian Dollar exchange rate put in solid gains on Wednesday. While Sterling’s gains were limited by Brexit concerns, Canadian Dollar traders were disappointed by the Bank of Canada’s (BOC) latest monetary policy decision and this made it easier for GBP/CAD to advance.

The BOC left Canada’s monetary policy frozen as expected, but also expressed uncertainty about the outlook for policy in the near to long term. Investors hoping for the bank to give markets signals on what to expect in 2018 were disappointed and the Canadian Dollar weakened.
As of Wednesday, 6th December 2017, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1341, GBP USD exchange rate was 1.3388, GBP AUD exchange rate was 1.7697, GBP NZD exchange rate was 1.9453, and GBP CAD exchange rate was 1.7121.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

Live Exchange Rates