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Sterling (GBP) Jumps as PM and Varadkar See ‘Pathway’ to Brexit Deal

Published: 10 Oct at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Germany, Ireland,

Pound Sterling (GBP) Edges Higher as PM and Varadkar ‘See a Pathway to a Possible Deal’

Sterling (GBP) was left under pressure on Thursday as data revealed that while UK GDP slumped -0.1% in August, in the three months to August the economy expanded by a better-than-expected 0.3%.

Meanwhile, GBP slipped ahead of Brexit discussions between Prime Minister Boris Johnson and his Irish counterpart, Leo Varadkar.

However, in the afternoon the Pound rose after the two leaders issued a statement that noted while there was not a breakthrough, the two had a ‘detailed and comprehensive discussion’ and they can ‘see a pathway to a possible deal’.

Looking ahead, the Pound is likely to be left under pressure as the UK moves closer to the 31 October Brexit deadline. If reports reveal that the likelihood the UK will leave the bloc with a deal by the deadline has decreased, Sterling is likely to slide.

Pound Euro (GBP/EUR) Exchange Rate Flat as Data Reinforces German Recession Fears

The Pound Euro (GBP/EUR) exchange rate was left muted on Thursday morning after data reinforced fears the German economy is likely to fall into a recession.

The bloc’s largest economy saw its monthly exports slump by -1.8% as a slowing global economy, Brexit uncertainty and US-China tensions all weighed on exports which German factories are reliant on.

Looking to Friday, it is likely the single currency will slump against the Pound following the release of Germany’s inflation rate. If September’s inflation stagnates and moves further from the European Central Bank’s (ECB) target, EUR sentiment will slide.

Pound US Dollar (GBP/USD) Exchange Rate Rises as Core US Inflation Retreats

On Thursday afternoon the US Dollar (USD) slumped against the Pound (GBP) as risk-appetite rose thanks to comments from US President Donald Trump.

Trump tweeted that he would meet Chinese Vice Premier Liu He at the White House on Friday, causing the safe-haven USD to suffer losses.

Meanwhile, the Dollar slumped as data revealed that US consumer prices were left unchanged in September, and underlying inflation retreated. This caused expectations for a third US Federal Reserve rate cut to increase.

Looking ahead to Friday, the ‘Greenback’ is likely to edge down against the Pound following the release of US import and export prices. If prices slump further than expected thanks to the ongoing trade war between the US and China, USD sentiment will slump.

Pound Canadian Dollar (GBP/CAD) Exchange Rate Edged Up as Oil Prices Slumped

The Pound (GBP) rose against the Canadian Dollar (CAD) as US-China trade tensions weighed on oil prices.

Chinese officials lowered their expectations for a breakthrough during this week’s talks after the US blacklisted 28 Chinese companies and hit officials with visa restrictions due to human rights abuses of Muslim minorities.

Looking ahead, the Canadian Dollar could rebound on Friday following the release of Canada’s employment and average wages data. If September’s unemployment rate edges lower while wages rise, the ‘Loonie’ is likely to rise.

Pound Australian Dollar (GBP/AUD) Exchange Rate Left Flat as Aussie Home Loans Jumps

The Australian Dollar (AUD) was left muted against the Pound (GBP) as data revealed that the Reserve Bank of Australia’s (RBA) recent rate cuts have boosted the housing market as approvals for new home loans increased for the second month.

However, the rate cuts have done little to revive the broader economy, which likely left the ‘Aussie’ under pressure.

Looking ahead to Friday, the Australian Dollar could edge lower following the release of the RBA’s financial stability report. If the bank is overly dovish, it could weigh on AUD.

Pound New Zealand Dollar (GBP/NZD) Exchange Rate Slumps on Brexit Optimism

On Thursday afternoon, the Pound New Zealand Dollar (GBP/NZD) exchange rate rallied on Brexit optimism.

Meanwhile, New Zealand’s food inflation rose by 2.2% in September due to rising prices of meat, poultry, and fish, which likely left the ‘Kiwi’ under pressure.

Looking ahead, NZD could extend its losses following the release of September’s electronic retail card spending. If spending does not rise as high as expected, it could cause the ‘Kiwi’ to slump further.

As of Thursday, 10th October 2019, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1296, GBP USD exchange rate was 1.2435, GBP AUD exchange rate was 1.8393, GBP NZD exchange rate was 1.9673, GBP CAD exchange rate was 1.6527, and GBP CNY exchange rate was 8.8492.
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.

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