Tuesday’s trading session proved to be a quiet one across foreign exchange markets. There were 2 familiar occurrences; the pound remained under pressure while the US dollar continued to display resilience.
The market has now had time to fully evaluate and react to the recent European elections. Its reaction has been somewhat subdued with very little clear reaction to the results which saw new support emerge for both liberal and green parties as well as the far-right too. It seems like the middle ground of European politics is evaporating to either side on the far left or right.
The pound is still encountering strong selling as UK and US traders and dealers have returned back to their desks after Monday off, observing national holidays. It’s hard to see much positivity out there for sterling. We’re now stuck in limbo, waiting for Theresa May to depart and then enduring a potentially 4+ week process of selecting a new Tory leader. It’s clear there will be not be amendments or concession sought from the EU within this time. What is clear is that we’ll be hearing a hell of a lot more on leaving the EU with a deal or without from many of the Tory hopefuls. No doubt, this will have a negative impact on GBP. $1.26 and €1.13 may sound like poor levels to buy given sterling’s recent levels but they’re a lot more palatable than potentially €1.24 and €1.11!
Today’s only highlight on the calendar is an interest rate decision from the Reserve Bank of Canada. No change is expected, they’re forecast to maintain rates at 1.75%.
Written by Viv Savani. 8:09am, May 29th 2019
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8:46am, April 17th 2019
GBP falls as reports surface that Brexit talks have stalled…