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Barnier’s Fresh Brexit Comments Boost Pound, Risk-Sentiment Remains Low

Pound News: Pound Bullish on Signs of Brexit Progress

Most of the Pound’s gains last week came about as a result of comments from EU Chief Negotiator Michel Barnier, regarding progress in UK-EU negotiations.

Barnier gave the Pound yet another boost on Monday, as he said it would be ‘realistic’ to expect that a UK-EU deal could be reached within the next eight weeks. Sterling saw further support as Britain’s July Gross Domestic Product (GDP) growth rate beat forecasts month-on-month.

While perhaps not as influential as more Brexit developments or this week’s Bank of England (BoE) policy decision will be, the July UK job market report could still influence the Pound today. Upbeat wage data would be GBP supportive.

Euro News: Eurozone Data Weighs on Shared Currency

The Pound was able to more easily climb versus the Euro on Monday, as the latest Eurozone data has continued to show that Eurozone businesses are becoming more concerned about geopolitical issues.

Sentix’s Eurozone confidence index fell to 12.0 from 14.7, missing the forecast figure of 14.6 as investors become more concerned that US trade protectionism could hit the Eurozone. It followed last Friday’s underwhelming Eurozone growth rate projections.

The Eurozone’s Q2 employment change figures, or ZEW’s September economic sentiment survey stats, could influence the Euro if they surprise investors today.

US Dollar News: USD Slips on US Trade Protectionism Uncertainties

While the US Dollar has been benefitting from US trade protectionism and subsequent demand for safe-haven currencies in recent months, concerns are now rising that these could impact the US economy too.

US President Donald Trump has indicated he could put tariffs on almost all US imports of Chinese goods, and concerns are also rising about US-Japan trade tensions. On top of this, US data has not been strong enough to help the US Dollar remain near its best levels.

There will be no notable US data published today, so the Pound to US Dollar exchange rate will once again be driven by developments in US trade protectionism and safe-haven demand.

Canadian Dollar News: Rising Oil Prices Help CAD Avoid Losses

While the Pound to Canadian Dollar exchange rate hit its best levels in over a month on Monday, its gains may have been even stronger if the Canadian Dollar was not supported by stronger oil prices throughout the day.

As oil is Canada’s most lucrative commodity, the oil-correlated Canadian Dollar firmed on Monday.

Canadian housing starts data will be published today, but this is unlikely to have a notable impact on the Canadian Dollar. Oil prices and trade developments are more likely to be influential.

Australian Dollar News: AUD May Have Further to Fall

Some mixed Australian data on Friday didn’t do much to help the risky commodity-correlated Australian Dollar, and worsening US-China trade tensions are keeping AUD under pressure.

Australian Dollar investors will spend most of today reacting to the NAB’s August business confidence report and risk appetite.

 

Upcoming Data

Tuesday, 11th September

02:30    Australian NAB Business Confidence

08:00    Eurozone Employment Change

09:30    UK Job Market Report

10:00    German and Eurozone ZEW Economic Sentiment

13:15    Canadian Housing Starts

15:00    US Wholesale Inventories

 

Tom Taylor

FX Manager

tnt@fcgworld.co.uk

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