The pound made gains on Monday as investors who previously sold the pound on weak data, returned to the British currency in light of US strikes on Iran’s top military commander. Last week the pound had fallen after data showed that Brexit delays had taken its toll on the UK. Some revisions to a business survey supported the pound on Monday, though, with the focus now shifting to a parliamentary debate on Brexit legislation today.
The pound rose 0.7% against the dollar, but this is still lower than last week’s $1.32. Sterling also gained 0.4% against the euro, but some analysts believe that a drop is coming with the potential for a rate cut and weaker economic data. Despite the UK leaving the EU, uncertainty now lies in the negotiations for an ongoing trade deal required by the end of this year.
GBPUSD opened at 1.3073 and jumped in the morning to a high of 1.3163 before levelling out for the rest of the day, closing at 1.3162
GBPEUR opened at 1.1709 and jumped to 1.1757, and then continued to rise in the afternoon to close at 1.1766
The dollar made gains against the safe-haven currencies following last week’s attacks on Iran; however, it remains weaker against the Swiss franc. The price of oil jumped 4% following the bombings, and escalating rhetoric between the two sides has given investors’ concerns. However, some analysts argue the knee-jerk reaction will be short-lived, with some stocks already back to where they were before the attacks.
The dollar gained 0.2% against the Japanese yen and Monday but was down 0.3% against the franc. Overall the dollar index was down 0.2%. The dollar is regarded as a safe-haven currency but usually does not perform as well as more traditional safe-havens like the franc and the yen. Currencies sensitive to global risk appetite were weaker, such as the New Zealand and Australian dollars, as well as the Swedish crown.
EURUSD opened at 1.1166 and reached a morning high of 1.1203 before dropping slightly in the afternoon to close at 1.1190