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Pound (GBP) Rises as Theresa May’s Brexit Deal Gains the ERG’s Support

Published: 26 Mar at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Germany, Russia,

Pound Sterling (GBP)

The Pound (GBP) recovered today following news that the European Research Group (ERG) would be willing to back Prime Minister Theresa May’s Brexit deal.

This has eased fears of a possible no-deal Brexit, with the ERG – along with the DUP – previously being one of the major obstacles for May’s withdrawal agreement passing through Parliament.

However, many Sterling traders are looking ahead to tomorrow’s parliamentary vote by MPs on possible alternatives to Theresa May’s Brexit deal. And yet, increasing support from the ERG has buoyed traders’ confidence in the breaking of the Brexit deadlock.

US Dollar (USD)

The US Dollar (USD) has shown some signs of recovery today following comments from the former Chair of the Federal Reserve, Janet Yellen, who commented that it was unlikely that the US would see a recession following the recent interest rate slash for 2019.

Today has also seen President Donald Trump continue to rally on his victory following his clearing of claims of Russian collusion during the 2016 election campaign.

However, Democrats remain unconvinced, leaving some ‘Greenback’ traders cautious on fears of another political upheaval.

Euro (EUR)

The Euro (EUR) was weakened today following the publication of the German GfK Consumer Confidence Survey figures for April, which came in below expectation at 10.4 against February’s 10.7.

Rolf Buerkl, a researcher at GfK, said:

‘The lack of decisiveness regarding the nature and date of the UK’s exit from the EU, as well as the growing trade conflict between the EU and USA are clearly creating ever more uncertainty among consumers.’

Australian Dollar (AUD)

The Australian Dollar (AUD) benefited from easing fears of us recession today, following an increase in the US benchmark Treasury yields.

AUD has also benefited from increased hopes of a US-China trade deal following President Trump’s recent ‘exoneration’ of Russian collusion claims, and with talks set to go ahead between the two superpowers tomorrow, this has seen the ‘Aussie’ recover.

New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) steadied today following yesterday’s mixed New Zealand economic data, with exports for February for increasing above expectation to an overall decrease in the trade balance figures.

However, some of these losses have been muted by New Zealand’s Prime Minister Jacinda Ardern announcing a long-awaited trip to China. China is New Zealand’s largest trading partner, and any signs of improving relations has buoyed market confidence in the ‘Kiwi’.

Canadian Dollar (CAD)

The Canadian Dollar (CAD) generally remained flat today despite rising oil prices, with the ‘Loonie’ only just recovering from market fear of a slowing global economy.

A dispute between Canada and China over China’s ban of Canadian canola has caused many Canadian Dollar investors to remain cautious, as the Canadian economy relies heavily on exports.

As of Tuesday, 26th March 2019, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1718, GBP USD exchange rate was 1.3212, GBP AUD exchange rate was 1.8512, GBP NZD exchange rate was 1.9124, GBP CAD exchange rate was 1.7678, GBP CNY exchange rate was 8.8726, and GBP RUB exchange rate was 85.0434.
Dominic Lee About Author: (473 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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