The Pound exchange rate backed away from political instability on Tuesday, falling against the Canadian Dollar (GBP/CAD) and other currency majors such as the Swiss Franc (GBP/CHF) and Swedish Krona (GBP/SEK).
Today an urgent question was asked in commons after news from the Electoral Commission showed that Vote Leave broke electoral law in it’s Brexit campaign. The morning had seen calls from many to deem the June 2016 referendum illegitimate after spending limits were breached. Meanwhile, in the UK, Bank of England (BoE) Governor Mark Carney has spoken about Brexit once again, saying that a no-deal scenario would have a massive economic consequence.
‘Our job is to make sure we are as prepared as possible… Speaking very narrowly about the financial services side, in the event of a no-deal scenario… There would be big economic consequences. We might have a lot of idle bankers as there is not a lot of demand for their services.’
Canadian Manufacturing Enjoys an Upswing
In Canada, an upswing in Manufacturing Sales is positive news for the economy. May saw an increase of 1.4% on the month, a far better figure than the previous month’s -1.3% and the forecast 0.5%. The increase has been attributed to both the chemicals and machinery industries.
Friday will be an interesting day for the Loonie exchange rate when the Canadian Consumer Price Index reaches markets. There are expectations for a small rise on the year in June, to increase from 2.2% to 2.3%.
Meanwhile, the Swiss Franc is one of the strongest European currencies today on speculation that the Swiss National Bank (SNB) might look to hike interest rates by 2019. Thursday will see the release of Swiss Exports, Imports, and Swiss Watch Exports data which could be mildly influential for the safe-haven currency.
In Sweden, the nation’s central bank, Riksbank has been influencing the currency over the past quarter.
Riksbank Rate Hike Forecasts to Influence SEK Exchange Rate
The Swedish central bank, pushed the Swedish Krona to the lowest level since the financial crisis at the start of May when it suggested interest rates wouldn’t be rising as soon as markets had thought. The central bank suggested it didn’t envisage the first hike in seven years to take place until the end of the year, but the meeting minutes showed a disagreement. Riksbank Deputy Governor Cecilia Skingsley suggested that an upward revision to interest rates could be on the cards as soon as October in line with the central bank’s policy path.
Cecilia Skingsley, Riksbank Deputy Governor said: ‘If you look at the path it accommodates October as well as December. It’s hard to pinpoint exactly where you are versus your colleagues, and that can move around a little bit, but I think my statement was nothing dramatic, it was in line with how we see the policy path.’
Moving forward, central bank developments could influence the Swedish Krona and investors will be trying to assess when the next interest rate increases might take place. The Pound to Swedish Krona (GBP/SEK) exchange rate is trending at 11.5981. The Pound to Swiss Franc (GBP/CHF) exchange rate is trading at 1.3113. The Pound to Canadian Dollar (GBP/CAD) exchange rate is trending at 1.7350.