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Sterling Rebound Limited by UK Election Fears

Pound News: Hopes for Blocked No-Deal Brexit Spurs Sterling Rebound

Diminishing fears the British government could be driving the UK towards a no-deal Brexit saw the Pound make a strong recovery yesterday.

MPs pushing to prevent a no-deal outcome in parliament rejuvenated investor confidence, but the Prime Minister’s persisting calls for a snap general election are limiting gains.


Euro News: EUR Firms on Eurozone Data and Possible End to Italy’s Political Crisis

The Pound to Euro exchange rate advanced yesterday, but gains were limited by resilience in the Euro as the latest German services and Eurozone retail data exceeded forecasts.

Italy’s anti-establishment Five Star Movement have agreed to form a new coalition government with the centre-left Democratic Party. With a corresponding rise in Euro confidence, investors are hoping the news will draw a line under Italy’s political crisis.

Euro movement could also be influenced by German data releases today and tomorrow.



US Dollar News: Weak US Data and Doused Political Fears Weigh on USD

As fears eased over Brexit, Italian politics and the ongoing tensions in Hong Kong, the safe haven US Dollar lost some of its shine yesterday, with Tuesday’s surprise contraction in US manufacturing taking a further toll on the American currency.

More key US data is due through the end of the week, including today’s non-manufacturing PMI and factory orders stats. If these fall short the US Dollar’s losses could deepen.



Canadian Dollar News: Bank of Canada (BoC) Avoids Dovish Tone, Bolstering CAD

The Bank of Canada (BoC) took a less dovish tone than analysts predicted in yesterday’s September policy meeting. While the central bank acknowledged the toll taken by a sustained US-China trade war on the Canadian economy, they left the door open for possible rate cuts and subsequently strengthened the Canadian Dollar.

Investors will next turn their attention to tomorrow’s key Canadian job market report.



Australian Dollar News: ‘Aussie’ Avoids Losses Despite Mixed Data

The Australian Dollar proved one of yesterday’s better-performing currencies. While Australian growth matched expectations and slowed in the second quarter, the nation’s services PMI beat forecasts. This supported the Reserve Bank of Australia’s (RBA) relatively optimistic view on the Australian economy and boosted AUD.

This morning’s respectable Australian trade report, combined with fresh hopes for the US and China trade negotiations, should offer continuing support to the Australian Dollar today.



Upcoming Data


Thursday, 5th September

02:30    Australian Trade Balance

07:00    German Factory Orders

08:30    German Construction PMI

13:15    US ADP Employment Change

13:30    US Non-Farm Productivity

15:00    US Non-Manufacturing PMI

15:00    US Factory Orders



Alastair Archbold
Currency Trader
T: 01442 892 062

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