6th August 2018-Brexit unease continued to sap Sterling support

 
     

Brexit unease continued to sap Sterling support

The headline US non-farm payrolls increase was below consensus forecasts. Dollar losses were limited as markets still priced in a September rate hike, but longer-term yields fell.

The yuan recovered after intervention by the People’s Bank of China and measures which also provided some yen support.

Brexit unease continued to sap Sterling support, especially with weaker PMI data as European currency sentiment remained weak.

Global equities secured net gain on earnings optimism and lower bond yields, although losses in Chinese bourses restrained buying support.

Sterling lost ground early on Friday amid another raft of comments from the Bank of England Governor. Although the risk of a no-deal Brexit was relatively unlikely, Carney stated that the possibility was uncomfortably high which hurt sentiment.

The UK July PMI services-sector index declined to a 3-month low of 53.5 from 55.1 the previous month. Employment growth was weaker amid further evidence of staff shortages. There was some moderation in upward pressure on costs and the rate of increases in charges also eased slightly. Sterling was resilient in the face of disappointing data with some GBP/USD support below 1.3000, although gains quickly met selling interest and the UK currency settled marginally above this level.

CFTC data recorded a further marginal increase in short Sterling positions to 11-month highs, maintaining the potential for a position squeeze, but only if there is a shift in market sentiment. UK Trade Secretary Fox stated that the risk of a non-deal Brexit was above 50%, maintaining unease, although there were also reports that the EU could show some flexibility on the Irish border issue. There was little GBP/EUR change near 1.1250, with US strength keeping GBP/USD just below 1.3000.

     
 
       
 

GBP/EUR 

– 1.1242

 
 

GBP/USD

– 1.2993

 
 

GBP/CHF 

– 1.2932

 
 

GBP/JPY 

– 144.62

 
 

GBP/AUD 

– 1.7582

 
 

GBP/NZD 

– 1.9277

 
 

GBPCAD

– 1.6896

 
 

GBP/ZAR 

– 17.3470

 
 

GBP/NOK 

– 10.7271

 
 

GBP/SEK 

– 11.5882

 
 

EUR/USD 

– 1.1555

 
       
  All rates are indicative of interbank rates*  
       
 
 

GBP/EUR

 
 

GBP/USD 

 
 

EUR/USD 

 
       
 
   

07:00 EUR

German Factory Orders (M/M)

-0.10%

2.60%

 
   

09:30 EUR

Euro-Zone Sentix Investor Confidence

8.2

12.1

 
   

-

-

-

-

 
   

-

-

-

-

 
 
   
 
 
*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time.  CentralFX are not responsible for the rates shown.
 
 
 

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