The Pound managed to gain some support against the US Dollar (GBP/USD) in yesterday’s session after a sell-off on Friday. Theresa May’s statement in parliament on Monday has buoyed confidence, but GBP/USD has struggled to maintain gains overnight.
Update: UK Labour Market Figures Give Pound (GBP/USD, GBP/EUR) a Boost
Tuesday’s session saw the GBP/USD exchange rate climb over a cent on positive labour market data. The UK Unemployment rate hit 4.0% in the three months through November, down from the 4.1% seen in the previous reading. Additionally, Average Weekly Earnings shit up to 3.4% in the same time period, defying forecasts of holding steady at 3.3% and a 10-year high.
Euro Exchange Rate Slips Against US Dollar (EUR/USD)
Meanwhile, the Euro has been on a downward trajectory against the US Dollar (EUR/USD) as concern mounts that the European Central Bank (ECB) will release dovish meeting minutes from this week’s monetary policy meeting. While the Euro weakens against a number of currency majors, the Pound (GBP/EUR) has been able to gain some stability against it. While not quite hitting recent highs, the GBP/EUR exchange rate has been trading very comfortably above the lows seen in December.
The World Economic Forum in Davos has begun, and the International Monetary Fund (IMF) has been releasing growth projections. The IMF’s forecasts confirm a global slowdown is taking place, with the US-China trade war instigating some of the damage, and Brexit threatening to amplify the situation.
Pound Sterling Exchange Rate (GBP/EUR, GBP/USD) Awaiting Brexit Voting, Labour Asks for Second Referendum
Theresa May’s statement in parliament yesterday saw her state she’d become more flexible on the Irish backstop issue–something that may help her gain more support for her current deal. Next Tuesday will be an influential day of voting in parliament–something the government is trying to play down. In the interim, the Pound to US Dollar (GBP/USD) and Pound to Euro (GBP/EUR) exchange rates remain reactive and volatile to political news.
Interestingly, with 66 days to go until the official Brexit day, Labour Party leader Jeremy Corbyn has decided to put his support into a plan which may yield another referendum. The amendment will likely be part of the January 29th debate. Corbyn has been rather rigid in not supporting another referendum, but it’s a step towards a potential new ballot. The move may have been designed to block a no-deal Brexit, but Labour runs the risk of pushing pro-Brexit MPs to vote for May’s deal, rather than run the risk of no Brexit at all.
UK Labour Market Stats, Eurozone ZEW Surveys Ahead
Economic data to watch for today will be the UK Employment Change, Average Weekly Earnings, and Unemployment Rate figures due out this morning, which could provide some moderate influence to the Pound. Additionally, the Germana and Eurozone ZEW surveys will be out to detail economic sentiment. In the US, Existing Home Sales stats are expected; however, it’s worth noting some economic data has been delayed due to the ongoing partial government shutdown.
Today’s Interbank Exchange Rates (GBP/EUR, GBP/USD)
The GBP/EUR exchange rate has been trading at interbank levels of 1.1335. The GBP/USD exchange rate has been trading at interbank levels of 1.2874.