The Pound (GBP) initially slumped on Tuesday as the UK’s latest inflation figures weighed on market sentiment.
With the Bank of England (BoE) unlikely to raise interest rates for the foreseeable future, the news that UK inflation held at a five-year high in October prompted concerns that consumers are coming under increasing financial pressure.
While Sterling was able to mount a significant recovery by the end of the session by riding the Euro’s coattails higher, the UK currency looks to be driven lower again this morning as the UK’s latest earnings data shows that the gap between inflation and wage growth continued to expand in September.
The Pound Euro (GBP EUR) exchange rate plummeted by around a cent on Tuesday as the single currency was lifted by some impressive German GDP figures.
Data published by Destatis revealed that the German economy expanded by 0.8% in the third quarter, sailing past expectations that growth would hold at a still impressive 0.6%.
Adding to the Euro’s gains this morning was the release of the France’s final CPI reading for October, which confirmed that inflation rose from 1% to 1.1% last month.
Sterling was able to rally by around half a cent against the US Dollar (USD) on Wednesday afternoon as uncertainty over the prospects of US tax cuts caused some investors to shy away from the ‘Greenback’.
The US Dollar may see further losses later this afternoon as well with the release of the latest US CPI figures as economists forecast that domestic inflation will have slipped from 2.2% to 2% in October, likely lowering the prospects for rate hikes from the Federal Reserve next year.
The Pound Canadian Dollar (GBP CAD) exchange rate rallied by around a cent from its worst levels yesterday as a 1% decline in oil prices weighed heavily on the ‘Loonie’.
The fall back in crude prices came after the International Energy Agency cast doubts over future demand as it suggested that global oil consumption may not exceed 100 million bpd in 2018 as forecast.
After initially tumbling against the Australian Dollar (AUD) yesterday, Sterling mounted a major recovery last night, climbing by around two cents as Australia’s latest earnings figures missed expectations, with wage growth holding at 0.5% against expectations it would rise to 0.7%.
New Zealand Dollar
While the Pound New Zealand Dollar (GBP NZD) exchange rate was able to rally by around half a cent yesterday, the pairing appears to have all by relinquished all of Tuesday’s gains this morning in the wake of the UK’s latest wage figures.
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