The British pound remains under pressure following yesterday’s turmoil sparked by the twin resignations of Boris Johnson and David Davis. The former was unexpected, spooking the pound lower on fears that May’s Chequers plans will be dead in the water. As ever, it is uncertainty that instils the biggest fear in financial markets.
The EUR/GBP rallied yesterday, briefly reaching 0.8900 yesterday as the euro remained solid. The GBP/USD also dropped in volatile trading, testing the 1.3200 handle. The GBP/JPY actually managed to post gains, but this is primarily down to the weakness in the yen, with the pair lagging behind other yen pairs.
Dollar pairs are generally on the back foot this morning, with the AUD/USD unchanged and the EUR/USD slightly lower.
The dollar index is climbing again this morning, while the USD/CHF marks two days of moderate gains. The USD/CAD is also making small gains after selling off for the last fortnight.
Yen pairs are on the rise, with the USD/JPY testing recent highs. The AUD/JPY rocketed higher yesterday, with the EUR/JPY posting its highest level since May.
Today, we have the first release of the UK’s monthly GDP data at 09.30. At the same time, we have manufacturing production and goods trade balance.
German ZEW economic sentiment is at 10.00.
Yen pairs have been pushing higher for the last two days, but it’s the AUD/JPY that has been setting the pace.
Further side could be on the cards as the Aussie continues its rapid advance.