Pound sterling is currently selling off against all major currencies. The pound is currently the weakest against the Australian dollar and the US dollar. Yesterday, the pound ended the day flat. Trading volumes in the British pound have been fairly low following a spike in activity earlier this week. Despite increasing political instability (following the resignation of Brexit Minister David Davis and Foreign Secretary Boris Johnson), the pound is only slightly lower this week. Today's GBP/USD trading range is 1.3050 - 1.3210.
Looking at today's economic calendar (shown below), there are no significant economic data releases or monetary policy developments on the schedule. Instead, foreign exchange traders are focused on US President Trump's official visit to the UK. In a recent interview with The Sun, Trump criticized Prime Minister Theresa May's approach to Brexit. Specifically, the President said that May ignored his advice by pursuing a "soft Brexit" strategy that gives the European Union significant future leverage over the United Kingdom. He also warned that May has probably killed off any chance of a US trade deal, since the US will have to deal with the European Union as a whole under a soft Brexit scenario.
As the British pound is currently the weakest major currency today, Trump's comments appear to be having an impact. This being said, the pound has (so far) weakened by a relatively small degree. Thanks to global trade tensions and the focus of trade in the media, foreign exchange traders are sensitive to any new developments in this area. Beyond trade-related concerns, the British pound remains weighed down by slowing growth across most of Europe. Our outlook on the pound remains bearish.
GBP/USD is currently above 1.3170. EUR/GBP is up, with the exchange rate above 0.8850. The pound is down against the Australian dollar and down slightly against the Canadian dollar. GBP/AUD is currently above 1.7760, while GBP/CAD is above 1.7340.
|July 9||BoE Broadbent Speech|
|July 10||Balance of Trade MAY||-£2.79B||-£3.087B|
|July 10||Monthly GDP MAY||0.3%||0.2%|
|July 10||Industrial Production YoY MAY||0.8%||1.6%|
|July 10||Manufacturing Production YoY MAY||1.1%||0.9%|
|July 11||BoE Gov Carney Speech|
|July 12||RICS Housing Price Balance JUN||2%||-3%|
|July 13||BoE Cunliffe Speech|