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Pound Sterling (GBP) Flat as Cross-Party Brexit Discussions Close to Collapse

Published: 9 May at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China,

Pound Sterling (GBP) Flat as Cross-Party Talks Close to Collapse

The Pound (GBP) remained muted against most major currencies as reports suggested that cross-party Brexit talks were close to collapse.

It was suggested by ITV’s Political Editor, Robert Peston that before the Labour party launched its EU election manifesto they would announce that Brexit talks are ‘dead’.

However, Labour leader Jeremy Corbyn stated that the party was having difficulties negotiating with a ‘disintegrating government’ that has consistently refused to budge on its red lines.

Pound Euro (GBP/EUR) Exchange Rate Slides on Brexit Pessimism

The Pound Euro (GBP/EUR) exchange rate slipped over the course of Thursday afternoon as a fresh wave of Brexit pessimism hit Sterling.

There was a lack of notable economic data releases for the Eurozone, however it is likely that the heightened US-China trade tensions buoyed the safe-haven single currency.

Pound US Dollar (GBP/USD) Exchange Rate Slips as US Producer Prices Edge Up

The Pound US Dollar (GBP/USD) exchange rate slipped on Thursday afternoon following the release of the US Producer Price Index (PPI).

The US Labour Department revealed that US producer prices rose moderately in April, increasing by 0.2% following March’s jump of 0.6%.

However, further data showed that the number of Americans filing for unemployment fell less than expected last week.

This could raise concerns that the US labour market is beginning to lose momentum.

Unchanged Canadian Housing Prices Leaves Pound Canadian Dollar (GBP/CAD) Exchange Rate Muted

The Pound Canadian Dollar (GBP/CAD) exchange rate remained muted following the release of the Canadian New Housing Price Index.

Statistics Canada revealed that new housing prices in Canada remained unchanged in March for the seven out of eight months.

There was little or no growth in major markets such as Toronto, which accounts for 29% of the housing market, and prices only edged up 0.1% in Vancouver.

Pound Australian Dollar (GBP/AUD) Exchange Rate Flat on Heightened US-China Trade Tensions

The risk-sensitive Australian Dollar (AUD) remained muted against Sterling (GBP) ahead of further face-to-face US-China trade talks.

On Wednesday, US President Donald Trump stated that China ‘broke the deal’, and the current tensions have caused risk appetite to remain fragile.

Meanwhile, China has made it clear that if the US imposes higher tariffs on Friday there will be retaliation.

Pound New Zealand Dollar (GBP/NZD) Exchange Rate Muted as RBNZ Slashes Interest Rates

The Pound New Zealand (GBP/NZD) exchange rate remained muted following a speech from the Reserve Bank of New Zealand’s (RBNZ) Governor Adrian Orr.

Governor Orr stated that the reason the central bank chose to slash interest rates from 1.75% to an all-time low of 1.5% was due to slowing global economic growth.

In an address to a Parliamentary Committee, Orr stated:

‘The reason for the cut is global economic growth has slowed.

‘Growth has come off rapidly in Europe, in China, though that’s stabilised more recently, and Australia […] so key trading partners.’

As of Thursday, 9th May 2019, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1596, GBP USD exchange rate was 1.3011, GBP AUD exchange rate was 1.8627, GBP NZD exchange rate was 1.975, GBP CAD exchange rate was 1.7529, and GBP CNY exchange rate was 8.8833.
Dominic Lee About Author: (438 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.

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