The UK Leadership Race Puts the Pound in the Spotlight

Earlier in the Day:

It’s yet another particularly quiet day on the economic calendar, with no material stats released through the Asian session.

A lack of stats left the majors on the defensive, with the Dollar finding support on bets that the FED would cut rates by a smaller amount than had been hoped.

Geopolitical risk added further support for the Greenback through the morning, with the Theresa May’s replacement due to be announced. There’s also hopes of progress on the U.S – China trade talks to factor in.

For the Asian Majors

At the time of writing, the Japanese Yen was down by 0.18% to ¥108.06 against the U.S Dollar. The Kiwi Dollar was down by 0.37% to $0.6734, with the Aussie Dollar down by 0.18% to $0.7023.

In the Asian equity markets, it was a mixed bag for the majors early on. The Nikkei led the way up, with a 1.05% gain at the time of writing. The ASX200 and Hang Seng were also in positive territory, up by 0.51% and 0.11% respectively. The CSI300 bucked the trend early on, falling by 0.11%.

The Day Ahead:

For the EUR

It’s also a quiet another quiet day ahead, with no material stats due out of the Eurozone. A lack of stats will continue to leave geopolitical risk to provide direction on the day.

Rising tension in the Middle East and a Boris Johnson win in the UK leadership race would be considered negatives for the EUR.

At the time of writing, the EUR was down by 0.14% to $1.1193.

For the Pound

Economic data is limited to July’s CBI Industrial Trend Orders. Barring impressive numbers, the Pound will remain in the hands of UK Parliament.

The new leader of the Conservative Party and the British Prime Minister will be announced later today and will influence the Pound.

Outsider Jeremy Hunt would be considered the most favorable outcome for the Pound. Boris Johnson will do his best to take Britain out of the EU by 31^st October, deal or no deal…

At the time of writing, the Pound was down by 0.14% to $1.2458.

Across the Pond

Existing home sales figures are due out later today. While the Dollar will react to any particularly dire numbers, the focus will remain on Trump and FED monetary policy.

There’s plenty for the markets to consider at present, including but not limited to, Iran, Trade and FED monetary policy.

At the time of writing, the Dollar Spot Index was up by 0.19% to 97.438. The Dollar found early support from expectations of a smaller rate cut next week.

For the Loonie

It’s a quiet day ahead, with no material stats due out of Canada. A lack of stats leaves the Loonie in the hands of crude oil prices.

The Loonie was down 0.11% at C$1.3134, against the U.S Dollar, at the time of writing.