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Pound and Euro Exchange Rates Struggle

Pound News: Conservative Leader Frontrunner Keeps No-Deal Brexit Fears Alive

It looks like the Pound may be in for another lacklustre week, with the British currency flat-lining on Monday.

Over the weekend Boris Johnson (frontrunner in the Conservative party leadership contest) pledged to go through with Brexit by the 31st of October. This exacerbated concerns that he would sanction the UK leaving the EU without a deal.

No notable UK data will be published today, leaving Pound investors to react to any potential political developments.

Euro News: EUR Struggles amid German Recession Fears

The Euro came under pressure at the start of the week as fears for the Eurozone’s powerhouse economy mounted.

Yesterday saw the publication of Germany’s May trade balance and industrial production figures. While German exports beat expectations, weaker industrial production worsened concerns that Germany’s economy may be headed for recession. This made it easier for GBP/EUR to avoid losses.

Eurozone data is unlikely to drive Euro movement today, leaving investors focused on movement in rival currencies.

US Dollar News: USD Movement Limited

Investors bought the US Dollar last week as hopes for US-China trade relations rose and the latest US Non-Farm Payroll data beat expectations. These factors caused Federal Reserve interest rate cut bets to lighten slightly, which led to higher US Dollar demand at the end of the week.

Demand for the US Dollar has been a little more mixed so far this week.

Investors will pay close attention to today’s US business optimism and job openings stats, as well as any notable comments from Fed Chairman Jerome Powell.

Canadian Dollar News: CAD Rally Continues

While the Canadian Dollar’s long rally has eased slightly, the currency has continued to climb and yesterday saw GBP/CAD touch yet another 2019 low.

Despite some underwhelming Canadian job data at the end of last week, other recent strong Canadian data and signs of recovery in the US economy are keeping investors confident that the Bank of Canada (BoC) could continue to hike Canadian interest rates.

Canada’s latest housing starts and building permits data will be published today, but investors may be hesitant to move too much on the Canadian Dollar ahead of tomorrow’s session when the BoC will deliver its hotly anticipated July policy decision.

Australian Dollar News: ‘Aussie’ Rebounds Following Friday Slide

For the latter half of last week, investors sold the Australian Dollar from its best levels due to a combination of profit-taking and softening Federal Reserve interest rate cut bets.

However, the Australian Dollar mounted a slight recovery yesterday.

Australian Dollar investors will be digesting this morning’s Australian business confidence data from NAB ahead of tomorrow’s Australian consumer confidence report from Westpac.

 

Upcoming Data

Tuesday, 9th July

02:30    Australian NAB Business Confidence

11:00    US NFIB Business Optimism

13:15    Canadian Housing Starts

13:30    Canadian Building Permits

15:00    US JOLTs Job Openings

Alastair Archbold
Currency Trader
T: 01442 892 062

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