The Pound (GBP) fell against the majority of its peers yesterday as the BBC obtained a letter written by former EU ambassador Sir Ivan Rogers to his staff, in which he accused certain members of the government of ‘muddled thinking’ over ‘Brexit’ and said that his advice on Europe was being ignored.
Meanwhile Markit reported a better than expected Construction PMI result, with the UK’s construction sector growing from 52.8 to 54.2 in December. however it did little to change Sterling’s fortunes as analysts forecast that firms will face significant challenges in 2017 as the low value of the Pound drives prices of raw materials up.
The Pound Euro (EUR) exchange rate saw some fluctuations on Wednesday but ultimately fell overnight as ‘Brexit’ fears began to drag on Sterling once again.
The single currency was bolstered by a better than expected Consumer Price Index which showed that inflation in the Eurozone jumped from 0.6% to 1.1% in December, reaching a three-year high and closing in on the European Central Bank’s (ECB) target of 2% inflation.
‘Cable’ managed to buck the trend yesterday as it rallied by over a cent from its worst levels thanks to some disappointing US data.
The US Dollar (USD) was softened on Wednesday by the latest MBA Mortgage data, which reported that mortgage approvals fell from 2.5% to 0.1% in the last week of 2016.
Sterling dropped by around a cent against the Canadian Dollar (CAD) on Wednesday, reaching a new two-month low as growing optimism around OPEC’s production cut agreement caused oil prices to rise, strengthening the ‘Loonie’.
The Pound Australian Dollar (AUD) exchange rate managed to end yesterday’s session close to where it began thanks to an upbeat credit report from the Bank of England, which reported that credit growth was at an eleven-year high at the end of 2016.
However Sterling has been unable to hold this morning as the ‘Aussie’ was bolstered by an impressive Chinese Services PMI.
New Zealand Dollar
The GBP NZD exchange rate fluctuated yesterday due to Sir Ivan Rogers shock resignation as the UK’s EU ambassador just week before ‘Brexit’ negotiations were expected to begin, with the currency pairing ultimately falling this morning as the New Zealand Dollar was strengthened by a slight uptick in risk appetite.