GBP Down on Trump’s Brexit Criticism

Trump's Brexit approach criticism has weighed on the GBP while the USD has gained. Politics remains key.

Previous Day's Market Highlights

The ECB Meeting Minutes were in line with the view that asset purchases will wind down by the end of the year and interest rates will stay on hold until at least next summer, providing little new information, and emphasised the use of forward guidance as a policy tool. As other central banks have done, the ECB expressed concerns about trade tensions. The dollar briefly weakened as CPI data disappointed. The pound had a muted reaction to the Brexit white paper.
 
Euro-dollar held below 1.17 and sterling-euro remained around 1.13. Sterling-dollar tested a break below 1.32 before dropping lower in overnight trading. Oil prices dropped yesterday morning on trade war tensions and reports that Libya would increase supply.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1298 1.1471 1.1234 2.07%
GBP/USD 1.3157 1.3363 1.3049 2.35%
EUR/USD 1.1646 1.1791 1.1510 2.38%
GBP/AUD 1.7766 1.7981 1.7472 2.83%
GBP/NZD 1.9468 1.9622 1.8932 3.52%
GBP/CAD 1.7326 1.7791 1.7168 3.50%

Today's Market Highlights

The pound saw pressure over night on reports that US President Trump has criticised the government’s Brexit negotiation approach. Investors will watch for any further headlines regarding the Brexit white paper. Additionally, the dollar has caught a bid tone this morning, pushing sterling-dollar lower below 1.32 and euro-dollar below 1.17.
 
MPC Member Cunliffe, whose term expires later this year, is due to speak at the Cumbria Chanmber of Commerce (12:00 BST). For the US, the only release of note is the preliminary Michigan Consumer Sentiment, forecast to be unchanged and therefore likely to have a muted impact on the currency. Towards the end of the day, the Fed releases its semi-annual Monetary Policy Report (16:00) and Fed Member Bostic speakers at 17:30.
 
Highlights next week include UK labour market and CPI data, Eurozone final June inflation, Retail Sales from the US and the UK, and Semi-Annual Testimony from Fed Chair Powell.

Today's Economic Calendar

Time Currency Release Consensus Previous
12:00pm GBP MPC Member Cunliffe Speaks
3:00pm USD Prelim Michigan Consumer Sentiment Index (Jul) 98.2 98.2
4:00pm USD Fed Monetary Policy Report
5:30pm USD Fed Member Bostic Speaks

Caxton