Pound (GBP) Falls as No-Deal Brexit Fears Rise as Boris Johnson Heads to Europe

Published: 21 Aug at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, France, Germany, Ireland, Italy,

Pound Sterling (GBP)

The Pound fell against many of its peers today as Prime Minister Boris Johnson headed to Europe to renegotiate the Irish backstop with German Chancellor Angela Merkel and French President Emmanuel Macron.

However, as both leaders are expected to reject the removal of the backstop, this has left many Sterling traders feeling jittery on the now increased likelihood of a no-deal Brexit on October 31.

US Dollar (USD)

The US Dollar has remained subdued today ahead of the Federal Open Market Committee (FOMC) minutes which are due out later today.

US Dollar traders are remaining cautious, however, as these could indicate a more dovish tone taken by the Federal Reserve, which is expected to cut rates in September.

Euro (EUR)

The Euro struggled to make any notable gains against its competitors today following the resignation of Italian Prime Minister Giuseppe Conte, who withdrew due to disintegration in the coalition Government, comprised for the League and the anti-establishment 5-Star Movement.

Brexit has also remained in focus for many Euro traders, with concerns increasing that the UK could leave the EU without a deal.

Australian Dollar (AUD)

The Australian Dollar benefited from the release of the Australian Westpac Leading Index figure for July today, which improved from -0.08% to 0.14%.

Bill Evans, an Analyst at Wespac, commented:

‘This is first above trend read since November last year. Further confirmation of this around trend reading would be consistent with the economy growing around trend for the last three or four months of 2019 and well into the first half of 2020.’

New Zealand Dollar (NZD)

The New Zealand benefited from heightened risk appetite ahead of the US FOMC minutes today, with traders expecting the US central bank to take a more dovish approach to monetary policy.

However, US-China trade tensions have remained in focus after US President Donald Trump vowed to ‘take on China’, further souring relations between the two superpowers.

Canadian Dollar (CAD)

The Canadian Dollar held relatively steady today following the publication of the Bank of Canada’s inflation figures for July, which fell below forecasts and held steady at 2.0% for a second month straight.

Nathan Janzen, a Senior Economist at the Royal Bank of Canada, said:

‘The picture hasn’t changed a lot. The economic data lately has been pretty strong and with inflation still running around 2% it’s tough for [the Bank of Canada] to justify a move immediately as soon as their next meeting.’

As of Wednesday, 21st August 2019, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.0936, GBP USD exchange rate was 1.213, GBP AUD exchange rate was 1.788, GBP NZD exchange rate was 1.8941, GBP CAD exchange rate was 1.6116, and GBP CNY exchange rate was 8.5674.

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