Currency Update - The Luck of the Irish?

Today's Currency Market Focus Includes:

GBP: Luck of the Irish?
EUR: Firms up but risks remain
USD: Dollar dives

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GBP: Luck of the Irish?

Sterling remains at elevated levels on hopes that a Brexit deal is imminent.

The EU’s chief negotiator has hinted that an announcement could be made as soon as next week.

The stumbling block remains the Irish border. The EU is adamant that checks must take place on goods crossing the border but the Northern Irish party is strongly opposed to this.

The problem is Theresa May’s government needs the support of the Northern Irish to retain a majority in parliament after her disastrous election result last year.

So the tail risk for Sterling is that May agrees a deal with the EU but can’t get it approved on home soil.

EUR: Firms up but risks remain

The Euro has found a bit of support as the week has unfolded.

Fears over Italy’s new freewheeling government have subsided for now. But the risks remain. Italy’s economy is 10 times the size of Greece – it can’t be swept under the carpet.

If the Italian’s begin to break EU fiscal rules it will undermine the Euro’s hard-fought reputation as a stable and sound currency.

USD: Dollar dives

The US Dollar has hit a 1-month low against a basket of its peers. A Wall Street sell-off and lower than expected inflation numbers yesterday triggered the falls in the buck.

The weak inflation numbers coupled with last week’s soft jobs data have lowered the prospects of further interest rate rises in the US. As a result, the Dollar is becoming less attractive to investors.

Thanks For Reading, What Next?

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Current rates:

Friday 12th October 2018 at 10:40

£1.00 GBP = 1.1409 EURO

£1.00 GBP = 1.3219 USD

£1.00 GBP = 1.8566 AUD

£1.00 GBP = 2.0278 NZD

£1.00 GBP = 1.7210 CAD

£1.00 GBP = 19.0810 ZAR

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