Daily Brief

Daily Brief

See recent articles

Bad Brexit

Doubts re-emerge

Last week did not end happily for sterling. The UK gross domestic product data were uninspiring and Johnson Minor resigned from Theresa May's cabinet, prompting a media onslaught on the prime minister's Brexit plan.  The pound lost ground on Friday and gapped lower when the Far East opened this morning.

Mr Johnson's resignation letter set out in no uncertain terms his objections to the government's proposed deal. It was the catalyst for other doubters - on both sides of the Commons aisle - to come out and air their objections.  After a week or more of optimism that a deal was imminent, investors were reminded at the weekend that it is not just the Conservative party that must come to an agreement: Parliament must support it too, as must another 27 EU governments.

Sterling seemed sickly on Friday and it looks even shakier this morning. On the day (0600h Friday to 0600h today) it is down by an average of 0.8% against the other majors, sharing last place with the South African rand.  The pound has lost one euro cent, one and a half Japanese yen and a cent and a half each to the US dollar and the Swiss franc.

GDP flash

Britain's gross domestic product expanded by 0.6% in the third quarter, but not at all in the last of those three months. The most worrying - if not surprising - aspect of the data was the 1.2% quarterly decline in business investment.

The third consecutive quarterly decline in business investment, according to the Office for National Statistics, is attributable in large part to "Brexit-related economic and political uncertainty". That is unlikely to change any time soon, and even the good news of a 0.6% expansion was diluted by the  way much of the growth simply represented a rebound from Q2 sluggishness.

The lead on Friday and this morning was shared by the US dollar and the Swiss franc, with the yen and the Loonie close behind. There was not much of a role for the economic data: Switzerland, Canada and Japan had nothing to offer, while US producer prices (up 2.9%) and the provisional Michigan consumer sentiment index (98.3) were decent but not spectacular.

Slim pickings

Ecostats aplenty will be released during the next four days of this week but today the cupboard is, to all intents and purposes, bare. There are no data whatsoever from Britain, pan-Euroland or North America.

Investors will make what they can of a 6.2% annual increase in NZ electronic card retail sales, a 2.9% rise in Japanese domestic corporate goods prices and a provisional 1.1% monthly fall for Japanese machine tool orders. It probably won't be a lot, and nor will the Italian industrial output figures do much more than draw attention to the country's budget spat with the EU.

The sensation this morning is that sterling and the euro are almost equally unwanted. Both moved lower as the early-birds in London began their week.  And both crave good news - the euro from Rome, the pound from Brexitville.  

USD lead the major currency pack

USD lead the major currency pack

GBP suffers as Brexit narrative turns negative

GBP suffers as Brexit narrative turns negative

ZAR shares last place with the pound

ZAR shares last place with the pound

CHF & USD lead the major currency pack

CHF & USD lead the major currency pack

Weekly roundup

Weekly roundup

Go to Weekly round up
Personal payments

Personal payments

With a personal account you can enjoy competitive exchange rates and low fees on all your payments.

Find out more
Foreign exchange business solutions

FX business solutions

We provide tailored services to help companies make global payments and manage their foreign exchange risk

Find out more
Travel money

Travel money

Order your travel money for branch collection or secure it on our explorer multi-currency Mastercard®

Find out more