pound receeding

Pound (GBP) Suffers Amidst Renewed Brexit Uncertainty

Pound News: GBP Slips amidst Brexit Tensions

The Pound (GBP) shed some of this week’s gains following a flare-up of tensions between the European Union (EU) and the UK over the Northern Ireland protocol.  

Maros Sefcovic, the European Commissioner, said that the EU could ‘step up’ legal challenges against the UK if it violates the terms on the Northern Ireland protocol.  

As a result, GBP investors have become concerned about deteriorating ties between the UK and the EU, which could translate into strained trading relations later on. 

Looking ahead, Pound traders will be eyeing Friday’s speech from the Bank of England’s (BoE) Governor Andrew Bailey.  

Could hawkish forecasts for the British economy see the Pound head higher against the major currencies? 

Euro News: EUR Edges Lower on Weak German Data 

The Euro (EUR) ticked lower today, undermined by a surprise drop in German industrial production in May. 

This downside in the single currency was reinforced by a jump in the US Dollar, as a result of the strong negative correlation between the pairing. 

EUR traders will be awaiting today’s speech from Christine Lagarde, the President of the European Central Bank (ECB). 

Any dovishness about the outlook for the Eurozone in 2021 or beyond would see the single currency begin to fall against its peers. 

US Dollar News: ‘Greenback’ Benefits from Souring Risk Sentiment  

The US Dollar (USD) extended some of its gains this week due to cautious market mood. With concerns over rising Covid-19 cases in key economies, demand has risen for the safe-haven ‘Greenback’. 

Today will also see the minutes from the Federal Open Market Committee’s (FOMC) June policy meeting. 

Should the minutes reinforce the Federal Reserve’s new hawkish bias the US Dollar could soar. 

Conversely any more comments about US inflationary pressures being ‘transitory’ could see USD exchange rates weaken.  

Canadian Dollar News: Falling Oil Prices Limit ‘Loonie’ 

The Canadian Dollar struggled today following a sharp drop in WTI crude prices. This limited demand for the commodity-correlated ‘Loonie’ as OPEC+ supply disputes have sparked fears of the UAE increasing production. 

Australian Dollar News: Souring Risk Sentiment Dents ‘Aussie’ Demand 

The Australian Dollar initially strengthened during today’s Asian session, before starting to retreat during European trading hours, as a souring of market risk appetite weighed heavily on the high-yield currency. 

Data Releases 

06:00 GER Industrial Production (May) 

09:00 EU European Commission Economic Growth Forecasts 

15:00 CAN Ivey PMI (Jun) 

15:00 US Fed Monetary Policy Report 

18:00 US FOMC Minutes