With a no-deal Brexit seeming as good as guaranteed, the Pound fell further against the Euro (GBP/EUR) yesterday. However, escalating trade tensions took a toll on the US Dollar, with Cable (GBP/USD) managing to make some progress, while the Pound has also been finding support against the Indian Rupee (GBP/INR).
Sterling Slides Lower Against Euro as Political Fog Fails to Clear
The Pound Euro exchange rate (GBP/EUR) sought out fresh lows yesterday, pushing down to levels not seen for almost two years as the prospect of political disarray in the UK combined with the risk of a no-deal Brexit continued to loom large. The European Union is said to be working on the basis the UK will crash out of the trading bloc in three months’ time and has reiterated that there’s no room for renegotiation on the current divorce deal. Add to this how Boris Johnson is now threatening to ignore a vote of no confidence in order to deliver on his promise of Brexit by the year-end, and it’s perhaps understandable that support for Sterling is ebbing, given the uncertainty still facing the country in the months ahead.
Latest US Trade Move Knocks US Dollar Exchange Rate
The latest round in the US – China trade war has been badly received by markets globally, driving investors into safe-haven currencies such as the Yen and Swiss Franc, leaving even the US Dollar looking exposed. As a result, the British Pound – US Dollar exchange rate (GBP/USD) managed to find a little upside yesterday. It’s certainly not an endorsement of the outlook for the UK improving and could yet prove short-lived, but the pair tacked on as much as three-quarters of a cent at one point during the session. Further real impacts on the US economy, with China now blocking the previously agreed purchase of farm products from across the Pacific, increases the risk that the US could slide into recession. However, the fact it could drag the rest of the world with it again may stand to limit the extent of any downside pressure on the Greenback.
Why Did it Move? Pound to Indian Rupee (GBP/INR) Exchange Rate
The British Pound – Indian Rupee exchange rate (GBP/INR) has posted some significant gains in recent days. Emerging market currencies in general are seen as being exposed following the latest turn in the US-led trade war, while the situation in India has been further exacerbated by the revocation of the special status afforded to Kashmir. This has the potential to heighten tensions with Pakistan and investors are shying away from the Indian Rupee as a result. Having traded as low as 83.43 last week, the GBP/INR exchange rate moved as high as 86.4 last night.