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Currency Market Analysis

Sep 03, 2019 | Currency Market Analysis

Global Themes

Euro, pound hit as Brexit, ECB weigh

The euro plunged lower overnight after a weaker reading from German manufacturing added to fears about a European-wide slowdown.

The slowdown might cause the European Central Bank to cut interest rates, or take some alternative steps, when it next meets on 12 September

“No deal” in focus

The GBP weakened as UK Prime Minister Boris Johnson warned he would consider an early election to push through his “no deal” Brexit plan.

The Aussie continued to slip lower overnight as markets look ahead to a busy 48 hours in the Australian market.

Today, the current account release provides further information ahead of tomorrow’s all-important June-quarter GDP numbers.

RBA

The Reserve Bank of Australia is due today and expected to keep rates on hold — according to market pricing there is a 15% chance of a cut (source: Reuters).

More importantly, markets will be looking to the RBA’s future plans, with most forecasters expecting the RBA to cut again before the end of the year.

The RBA meets at 12.30pm.

Later tonight, US manufacturing activity gauges will be closely watched after last week’s numbers signalled a slowdown in this sector.


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