Carney Rejects Boris Claim.


Bank of England (BoE) Governor Carney rejected claims from Conservative Party leadership candidate Boris Johnson, that the UK could avoid EU tariffs in the event of a ‘no-deal’ Brexit. Given that Johnson remains a strong favourite to win the contest, Sterling sentiment remained fragile amid underlying political uncertainty, although the media focussed more on personal issues. Jeremy Hunt has urged Tory leadership rival Boris Johnson not to be "a coward" about facing public scrutiny as Mr Hunt said he was ‘not interested’ in his private life but he should ‘man up’ and debate with him on TV this week.

Given the battle for major EU posts, there were also major uncertainties over the potential for fresh negotiations, increasing the risk of severe tensions ahead of the October 31st Brexit deadline. Sterling overall lost ground to 1.1210 against the firm Euro but advanced to near 1.2750 against the Dollar as global market moves also had an important influence over the weekend.

Speculation that the House of Commons would look to block any ‘no-deal’ Brexit helped underpin sentiment and Sterling was little changed this morning as it traded just above 1.2730 against the Dollar.


The US manufacturing PMI index declined to 50.1 for June from 50.5 previously which was below consensus forecasts and the lowest reading for close to ten years. The services-sector component also edged lower to a forty-month low of 50.7 from 50.9 previously. There was a slightly faster pace of growth in new orders and backlogs increased slightly while employment growth and price increases were both subdued.

Overall, business confidence was hampered by uncertainty over tariffs and geopolitical risks. Relatively weak data and dovish Fed talk sapped Dollar support with a fresh retreat to three-month lows as the Euro pushed above 1.1350. The Dollar remained on the defensive this morning with the Euro around 1.1370.


The Euro surged to a three month high against the Dollar last week, reaching its peak of 1.1394 before coming under some selling pressure. Positive PMI data coming out from both Germany and France ( the regions two largest economies) showed no further deterioration in the Eurozone.

According to reports, European Central Bank (ECB) President Draghi confirmed that weakness in the economy was increasing and that in the absence of a sustained return to the bank’s inflation target, further stimulus would be required. The Euro, however, has been slightly protected as confidence in the US outlook deteriorates further.

Today's data:

05:00 JPY Leading Economic Index (Apr) 08:00 EUR IFO - Business Climate (Jun) (Germany) 08:00 EUR IFO - Expectations (Jun) (Germany) 08:00 EUR IFO - Current Assessment (Jun) (Germany) 12:00 EUR ECB’s Lautenschlager speech 12:30 USD Chicago Fed National Activity Index (May) 22:45 NZD Imports (May) 22:45 NZD Exports (May) 22:45 NZD Trade Balance (YoY) (May) 23:50 JPY BoJ Monetary Policy Meeting Minutes

0 views0 comments

Recent Posts

See All

EU no reason to talk!

GBP UK services PMI’s strengthened to 51.4 for July, above the forecast and a 9 month high. New business recovered and export orders saw notable improvement. Confidence remained fragile in light of th

Brexit Sapping Confidence

GBP UK construction PMI data recovered slightly to 45.3 in July, up on last month but also the third reading below 50.0 on the bounce and business confidence dipped to lows since late 2012. Brexit unc

UK Avoids Recession by a Whisker

GBP UK GDP grew 0.3% in May following a 0.4% drop in April, matching forecasts and year-on-year growth was slightly above forecast, at 1.5%. Industrial production increased 0.9% in May, less than fore

© 2019 Forexpat

Blue and Green Consultants Ltd T/A Forexpat, a trading partner with Currency UK Ltd, authorised and regulated by the Financial Conduct Authority (FCA)