Good morning, please see today’s entry to our Daily FX Market Commentary.
Well the interpretation of the Mayor of London – followed by a string of others, certainly gave the markets licence to punish the GBP, much more than I had thought in the earlier hours of yesterday morning.
Does this bit of news translate into a drop of 3 and a quarter cents? Apparently so.
The GBPUSD yesterday opened off the weekend at 1.4400 and dropped all the way down to 1.4075, so there is that fast break to either side we talked about earlier this week. I think as the GBP began to stabilise in the afternoon, we should see some slowdown in the advancement of the USD for now and watch out for some minor data today. The rate as I write is 1.4160.
The effect of yesterday’s moves were far less noticeable on the GBPEUR – though we still did see some sharp changes in the rate. At it’s high, we touched 1.3000 briefly before heading rapidly downwards. There was a low of 1.2760 but we actually recovered to spend most of the day sitting around the 1.2830 mark.
We are sitting on 1.2800 this morning.
I can see nothing of particular note on the economic calendar and so all attention for the currency pair will be focused on the Brexit talks that continue.
The Pound took a severe tumble yesterday as mentioned, with markets making much (surprisingly) of the support of some key politicians in the UK to exit the European Union. Today, the market will look to the find some support for the GBP as we open today in the wake of these moves.
With nothing on the economic calendar that relates specifically to information from the UK, the debate over our potential exit is left to intensify.
I expect today, though, that we might see a little rebound but a far, far quieter day for the GBP movements.