Possible Brexit delay has boosted sterling

BREXIT continues to dominate the pound this year, with sterling climbing on the back of some positive developments. This saw GBP/EUR rise from 1.10 euros to 1.12, while EUR/GBP has fallen from £0.90 to £0.89.

Meanwhile, GBP/USD climbed from $1.26 to $1.28, while EUR/USD held at $1.14.

So far, the pound has enjoyed two weeks of consecutive gains in 2019, with sterling bouncing back from initial losses both weeks, its most recent rally being driven by speculation that Brexit may be delayed.

Meanwhile, trade in the euro has been mixed, over the past couple of weeks, with some lacklustre data from the Eurozone stoking fears that some members may have entered a recession, in the fourth quarter.

At the same time, the US dollar has found itself on the back foot so far in 2019, as signals from the Federal Reserve, which suggest it may adopt a more-cautious approach this year, have limited the appeal of USD.

The upcoming parliamentary vote on the EU withdrawal deal looks set to dominate the pound, with analysts expecting some considerable volatility in GBP exchange rates, in the weeks to come, if the deal is rejected, as is widely forecast.

Meanwhile, EUR investors are likely to pay extra-close attention to the economic data coming out from the Eurozone, over the next couple of weeks, as they look for any additional signs that the bloc may be experiencing a downturn.

Finally, in the face of the ongoing US government shutdown, US data is looking pretty thin on the ground this month, potentially limiting movement in the US dollar.

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Posted by on Jan 18 2019. Filed under Business & Finance. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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