It was a different day for the Pound on Wednesday and this was down to the fact that the Bank of England issued a warning to banks about the possibility of a no-deal Brexit. These concerns had an effect on the Foreign Exchange rate against the Euro which dropped to 1.1194 although the currency did improve against the US Dollar, rising to 1.2574. The release of construction figures could offer some fresh hope for the Pound if the sector meets expectations.
It was a better picture for the Euro as it was boosted by the fact that the services PMI figures were better than expected. However, investors looking to make international payments are still waiting for the outcome from the latest European Central Bank policy meeting. It is expected that the PEPP bond-buying programme will be expanded, although the retail figures released today are likely to show a drop and that could cause problems.
The US Dollar rebounded slightly yesterday after the protests were not as bad as previous days, but improved domestic data helped to bolster the currency. Unemployment levels during May were not as high as expected, while the ISM non-manufacturing PMI we better than expected.