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Boris Johnson vows to leave EU

25th July 2019 Market Update

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🇬🇧 GBP –  Boris Johnson was sworn in as prime minister yesterday and renewed his promise to leave the EU by the 31st October. He also set about reshuffling his cabinet, with Sajid Javid the new chancellor, Priti Patel home secretary and Dominic Raab foreign secretary. The new cabinet has been filled with Brexiters, and there appears a renewed drive to force through Brexit before the 31st. Boris also appears to be trying to adopt a pro-business approach, which will help support sterling. There is no significant data from the UK today, however any political developments could help shape the exchange rates.

🇪🇺 EUR – Yesterday services and manufacturing PMI were released across Europe. Manufacturing overall was lower than forecast, and services was roughly in line with the market’s expectations. This had very little impact on the euro, weakening it slightly.

Today the ECB has a new interest rate decision, and this accompanied by an ECB press conference. Rates are forecast to stay the same at 0.00%. Despite this, Mario Draghi is under pressure to introduce a new era of stimulus and cut interest rates further. This is due to concerns over the global economic slowdown. Despite the market’s expectations that interest rates will stay the same, Mario Draghi could signal in a wave of new monetary stimulus before his term as president of the ECB is over.

🇺🇸 USD –  Flash manufacturing PMI was released from the US yesterday afternoon along with flash services PMI. Manufacturing was below expectations at 50.0, while services exceeded expectations at 52.2, cancelling each other out. This afternoon core durable goods orders are being released. This is expected to drop below the last reading.

The only data out today is existing home sales data.
 

Summary:

GBP: Boris renews his Brexit vow
EUR: Eurozone in the spotlight today as a new wave of stimulus could be around the corner
USD: Core durable goods orders to be released this afternoon


 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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