Daily Currency Update
On Thursday, Boris Johnson resigned as the UK Prime Minister. The news broke early morning yesterday that Boris Johnson was going to announce his resignation and it was confirmed outside number 10 Downing Street just after midday. The decision was made amidst the largest number of resignations in history within a prime minister’s cabinet and follows him winning a vote of no confidence last month, although 148 MPs voted against him. The exiting Prime Minister will now stay in office until a predecessor is chosen, however it is believed that the process that normally takes 3 months will be shortened or Boris Johnson will be replaced until a new Prime Minister is elected. This duty would normally fall to the Deputy Prime Minister who is currently Dominic Raab. Sterling climbed on the news taking GBP/USD above 1.2020 in the build up to the announcement and touched 1.2055 overnight. GBP/EUR has broken back through 1.1800. Key data releases in both the US and Europe will likely have a play on the currency crosses today, while next steps are taken by the conservative party to replace Boris Johnson.
Key Movers
Europe and the US will hold the headlines for economic data releases today. European Central Bank (ECB) head Christine Lagarde is due to give a speech at the economic meetings of Aix-en-Provence in France just before 1pm and is expected to discuss the risks facing the global economy. This will likely be of great interest to market participants ahead of the central bank’s next meeting where interest rate are expected to be lifted. This comes after yesterday’s ECB minutes which seemingly left the door open for bigger than expected rate hikes. Following this will be the US monthly jobs report, which is expected to shed more light on economic trends, with the number of Americans in paid employment seen increasing modestly though not by as much as the number of jobs added in May. EUR/USD opens this morning at new lows, dropping below 1.0140 at the time of writing. The trend in the currency pair has seen fresh lows daily and a move towards parity now looks possible.
Expected Ranges
- GBP/USD: 1.1910 - 1.2060 ▲
- GBP/EUR: 1.1750 - 1.1920 ▲
- GBP/AUD: 1.7490 - 1.7620 ▲
- EUR/USD: 1.0060 - 1.0170 ▼