The Pound (GBP) held steady against most of its peers yesterday as markets remain optimistic that the snap election called by Prime Minister Theresa May will lead to a great majority for the Conservatives.
Investors are confident that a landslide victory for the PM in June’s general election will grant her the mandate to pursue her plans for leaving the single market and strengthen her position in Brexit negotiations.
However the Pound was forced to retreat this morning following the release of the UK’s latest retail sales figures as they nosedived from 1.7% to -1.8% in March, performing far worse than predicted.
The Pound Euro (GBP EUR) exchange rate trended downward yesterday as polls suggested that Emmanuel Macron was pulling ahead of his closest rival, Marine Le Pen.
However last night’s terror attack in Paris prompted the single currency to drop once again as markets fear that Le Pen’s focus on national security and anti-immigration policy could resonate with the electorate just days before the first round of voting.
The Euro was able to stem its losses this morning however thanks to a remarkably resilient Manufacturing PMI for Germany, which fell slightly from 58.3 to 58.2 and beat expectations that it would tumble to 58.0.
Sterling remained relatively stable against the US Dollar (USD) yesterday as UK politicians began their first day of campaigning ahead of the general election.
The ‘Greenback’ was weakened slightly by the release of the latest Philadelphia Fed Manufacturing Index as it tumbled from 32.8 to 22 in April, but investors remained largely upbeat as over 50% of firms predicted that their capital investments would rise this year.
The US Dollar may rally from its recent lows later this afternoon however as US existing home sales are expected to have risen from 5.48m to 5.6m in March.
The Pound Canadian Dollar (CAD) exchange rate also trended flatly overnight on Thursday as despite oil prices edging up slightly the commodity is still set for its biggest weekly drop in a month, a worrying prospect for the crude-correlated ‘Loonie’.
The Canadian Dollar may also begin to retreat later this afternoon as the domestic CPI data is expected to show that inflation fell from 2% to 1.8% last month.
Sterling also held steady against the Australian Dollar (AUD) in overnight trading as despite iron ore prices beginning to recover from their recent nosedive, a report by Westpac shows the significant damage Cyclone Debbie did to Australian coal exports, with shipments for Australia’s second largest export plummeting by around a third since the storm battered the east coast.
New Zealand Dollar
GBP NZD edged slightly higher to strike a new eight-month high during the Asian session last night as the New Zealand Dollar softened following the latest domestic consumer confidence figures, as household sentiment tumbled from 125.2 to 121.7 in April.
You can get in touch with TorFx via email here or via the contact page.