The pound fell on Friday after comments from the Bank of England that interest rates may need to be cut for the economy to cope with ongoing Brexit uncertainty. The pound fell as much as 0.4% after policymaker Michael Saunders made dovish remarks. Despite a later rebound, it still finished 0.1% lower for the day.
Despite parliament passing a law forcing the UK to ask for an extension to the exit deadline, Boris Johnson has still refused to adhere to this. Investors are unhappy with the uncertainty this creates which is now weighing on the pound. Media reports indicated that this week could see a vote of no confidence in the Prime Minister, with opposition parties forming a care-taker government to request the extension and then call a general election.
GBPUSD opened near a low of 1.2275 having fallen sharply in early trading. The pair recovered across the morning to reach a high of 1.2324 before dropping to close at 1.2308
GBPEUR followed a similar pattern, opening at 1.1245 and reached an early afternoon high of 1.1271 before closing at 1.1247
The euro fell below a two-year low against the dollar early on Friday as weak economic growth continue to weigh heavily on the single currency, though it rebounded after reaching technical support levels. European Central Bank stimulus, along with negative rates and bond buying are putting pressure on the euro. Analysts have put the current support level at $1.0925
The Chinese yuan fell against the dollar after reports emerged that White House officials are looking at ways to limit US portfolio flows into China. The dollar gained 0.31% against the yuan.
EURUSD opened at 1.0918 having dropped across the previous day and through the evening. It picked up for the rest of the day, closing at 1.0944
