Sterling was again hampered by political and economic uncertainty during Monday.
A weak New York manufacturing survey triggered fresh concerns over the US outlook and reinforced speculation that the Federal Reserve would cut interest rates this year.
Bond yields edged lower with little net change in equities as caution prevailed. The dollar dipped lower, although doubts over all major currencies limited potential US selling.
Commodity currencies were undermined by growth concerns and dovish Reserve Bank minutes undermined the Australian dollar. Sterling declined to 5-month lows amid an absence of positive factors.
Precious metals recovered from intra-day lows as dollar doubts continued and risk appetite remained fragile. Bitcoin strengthened to fresh 13-month highs before fading slightly.
Sterling was again hampered by political and economic uncertainty during Monday. There was no evidence of a major change in the Conservative Party leadership race with Boris Johnson still seen as in a very strong position ahead of Tuesday’s second round of voting. Given his determination to leave the EU on October 31st, there were further concerns over the risk of a ‘no-deal’ outcome.
There were also reports that Chancellor Hammond could resign over opposition to Prime Minister May’s spending plans. The UK currency drifted weaker ahead of the New York open and dipped lower again in US trading with a GBP/USD slide to 6-month lows below 1.2550. GBP/EUR also pushed to fresh 5-month lows below 1.1150.
Political factors will remain important with the second round of Conservative Party voting on Tuesday while global risk conditions will also an important element with concerns over the international economy liable to undermine the UK currency, especially given the substantial current account surplus. Sterling remained on the defensive with GBP/USD below 1.2550 in early Europe.
|07:00||EUR German PPI (M/M)(MAY)||-||0.50%|
|07:00||EUR German PPI (Y/Y)(MAY)||2.40%||2.50%|
|10:00||German ZEW Survey (Current Situation) (JUN)||6||8.2|
|10:00||German ZEW Survey (Economic Sentiment)(M/M)(JUN)||-||-2.1|
|10:00||Euro-Zone Core CPI (Y/Y)(MAY 01)||-||0.80%|
|10:00||Euro-Zone CPI (M/M)(MAY)||-||0.70%|
|10:00||Euro-Zone CPI (Y/Y)(JUN)||1.70%||1.20%|
|10:00||Euro-Zone Trade Balance(APR)||-||22.5B|
|13:30||USD Building Permits (M/M)(MAY)||-||0.20%|
|13:30||USD Building Permits(MAY)||1.290K||1.290K|
|13:30||USD Housing Starts(MAY)||1.205M||1.235M|
|13:30||USD Housing Starts (M/M)(MAY)||-||5.70%|
|13:30||CAD Manufacturing Shipments (M/M)(APR)||-||2.10%|
|23:45||NZD Current Account (Q/Q)||-3.56B||-3.26B|