Tensions continue to grow for GBP, struggling to hold its levels against EUR and USD. Recent USD strength is coming from selloffs in stock markets from tariffs threats and once again proving that USD is a preferable choice of holdings while uncertainty is brewing. Another factor that could generate potential GBP weakness is the by-elections later this week. A setback for the labour government could bring back ambiguity of the labour leadership and like last month bring weakness to GBP if it unfolds.
This afternoon is holding a bundle of US Federal Reserve members speaking and labour data, ADP, being released. The weekly releases have been volatile recently with large differences indicating an unpredictable path of how the labour market is performing and will perform moving forward.
We have also seen volatility on JPY-pairs this week, first seeing a sell-off after Japanese PM, Takaichi, indicating a stronger stance against upcoming Bank of Japan rate hikes. JPY took large deficits to other currency pairs during Monday but has shown signs of recovery in the Tuesday session.
GBP/EUR 1.1441 GBP/USD 1.3493 GBP/AED 4.9575
GBP/AUD 1.9107 GBP/CHF 1.0430 GBP/CAD 1.8488
GBP/NZD 2.2615 EUR/USD 1.1780 GBP/ZAR 21.5542