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2019

Your need to know news affecting currency this week

Published: Wednesday 09 October 2019

  • Brexit worries continue to weigh on the Pound
  • US economy also feeling the pinch
  • Aussie Dollar dips on drop in confidence

Brexit worries continue to weigh on the Pound
 
A news report today says that UK Prime Minister Boris Johnson vows that the next manifesto for the Conservative Party will feature a Brexit deal promise and not a default no-deal Brexit. This did not help the Pound, however, which was hit hard yesterday on continued Brexit uncertainty as tensions heightened and UK-EU talks seemed to be faltering. Trump also waded in to the conversation, as the Pound fell against its US currency counterpart.
 
Sterling under stress from all sides
 
Sterling was dealt a further blow this morning despite initial optimism on reaching an agreement about the Irish backstop, when the EU’s chief Brexit negotiator, Michel Barnier, said that the EU was not yet in a position to reach a deal with the UK, keeping Pound under pressure and hovering at lows against its major currency partners. Bank of England (BoE) Governor, Mark Carney, spoke on Tuesday and, as is typical in these speeches, did little to support Sterling strengthening.
 
US economy also feeling the pinch
 
In the US, the Federal Reserve’s Jerome Powell also spoke today, discussing the efficacy of their monetary policy measures, but everything does not look rosy for the US economy, either. The US employment data did not live up to expectations in the latest results and the US-China trade tensions are taking their toll on economic performance. Yet the US Dollar remains stable and seems to be taking various economic and political announcements in its stride. How long this can last is another matter…
 
Aussie Dollar dips on drop in confidence
 
Down Under, the Australian Dollar has its own set of troubles, with consumer confidence falling to historic lows of 92.8 compared to last month’s 98.2 and not even the recent rate cuts from Australia’s central bank helping to revive the economy. The Australian Dollar dipped on the news.

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