Best Exchange Rates

Pound (GBP) Exchange Rates Continue Slide on Gloomy Brexit Analysis Document

Categories: GBP, Markets, News

Leaked Brexit Analysis Document Prompts Market Concern, GBP Exchange Rates Slide

The Pound (GBP) resumed its slide against a basket of the majors on Tuesday morning, encumbered by recent talk of a possible coup within the Conservative Party and this morning’s market reaction to a leaked Brexit impact assessment document.

The leaked government document asserted that Britain’s economy will be left worse off after Brexit, regardless of which deal is struck with Brussels.

The validity of this document was quickly called into question, however, with government sources asserting that the UK will not be worse off, and that the preferred avenue of a bespoke trade deal had not yet been analysed.

On the data front mortgage approvals in the UK fell to their weakest levels since January 2015, but consumer borrowing, a variable that the Bank of England (BoE) has been carefully watching, picked up pace for the first time in four months.

This has helped buoy the Pound somewhat, though its slide against a variety of other currencies has continued.

GBP/EUR Exchange Rate Slides, Eurozone GDP Growth Decelerates

The Pound Euro (GBP/EUR) exchange rate fell on Tuesday despite a small dip in the bloc’s overall GDP growth rate.

Gross domestic product (GDP) in the Euro area expanded at a rate of 2.7% in the fourth quarter of 2017 over the same quarter, previous year, missing the 2.8% expected and indeed the previous period’s 2.8% print.

The quarter-on-quarter reading printed at 0.6%, consistent with forecasts, but below the upwardly revised 0.7% expansion of the previous period.

Nonetheless, an expansion of 2.5% on the overall calendar year marked the most rapid rate of growth since 2007’s 3.4% increase, effectively demonstrating that the bloc continues to be in the midst of a broad cyclical expansion.

Because of this the GBP/EUR exchange rate remained in the Euro’s favour.

GBP/USD Exchange Rate Holds Steady Ahead of FOMC Rate Decision

The Pound US Dollar (GBP/USD) exchange rate held steady on Tuesday morning as the US Dollar’s rebound slowed.

Markets are currently awaiting a variety of significant events for the ‘Greenback’, with US consumer confidence readings for January due today. Employment readings and the highly anticipated US FOMC rate decision are due on Wednesday.

Fed Chair Janet Yellen will set interest rates for her last time tomorrow, before leaving in February to be replaced by the chosen successor, Jerome Powell.

The markets do not currently expect an interest rate hike this month, though further rate hikes are expected later this year.

Investors will nonetheless be keen to assess Yellen’s accompanying statement, as well as any comments she makes, with the positive performance of the US economy expected to keep things relatively upbeat.

In the meantime the markets remain slightly cautious.

GBP/CAD Exchange Rate Holds Ground as Crude Oil Falls

The Pound Canadian Dollar (GBP/CAD) exchange rate remained within a narrow band of trade on Tuesday as markets reacted to a second day of lower crude oil prices.

Crude oil took a dent along with many risk-correlated currencies on a strengthening US Dollar and rising US output.

Many analysts think the correction will be brief, however, with the primary concern being that inventories continue to shrink.

ABN Ambro Chief Energy Economist Hans Van Cleef shared this sentiment, stating:

‘I do have the feeling that market optimism pushed prices perhaps a little bit too high, but as long as inventories continue to decline, for me, personally, I’m more and more looking at a ‘buy-on-dips’ strategy, so I’m looking for a correction lower.’

Nonetheless, market demand for the commodity-correlated ‘Loonie’ continued to take a hit.

GBP/AUD Exchange Rate Climbs Ahead of AUS Inflation Data

Falling iron ore prices and the recent rebound in the US Dollar (USD) left the GBP/AUD exchange rate in the Pound’s favour on Tuesday morning, although the upcoming AUS inflation release and the US FOMC rate decision could change this.

On the data front the Australian NAB business confidence survey for January was released today, printing at 11, up from the previous period’s 7.

This survey, whilst giving an optimistic insight into the Australian economy, failed to give the ‘Aussie’ Dollar much purchase, with markets remaining far more concerned with the possibility that more US tariffs could prompt a trade war.

Wednesday’s Australian inflation release is expected to climb from 1.8% to 2.0%, year-on-year, whilst the quarter-on-quarter reading is forecast to inch up from 0.6% to 0.7%.

If this forecast proves accurate then the GBP/AUD exchange rate could come under renewed pressure.

GBP/NZD Exchange Rate Remains Soft on Upbeat NZ Trade Surplus

The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate remained soft on Tuesday morning with the ‘Kiwi’ Dollar held up by Monday’s NZ trade surplus report.

Official figures revealed that New Zealand’s monthly trade surplus hit its highest level in over two years, with December’s trade balance reading printing at NZ$640m, significantly above the expected NZ$-125m and the previous period’s NZ$-1233m.

Growing risk aversion, however, may have impeded the New Zealand Dollar’s lift from this news with the recent rally in the US Dollar (USD) negatively impacting the commodity currencies.

Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product. Full Disclaimer

BER Newsletter

Subscribe for the latest exchange rates, currency news and special offers directly to your inbox.

Best Exchange Rates - We make it Easy to Compare Exchange Rates & Fees of Banks and Currency Exchange & Payment Providers

Wynyard Green, 4 & 5/11 York St, Sydney NSW 2000

Disclaimer | Copyright | Privacy Statement


Best Exchange Rates is an information only service. By browsing on the website, using our comparison tools or FX provider referral service, you are asking Best Exchange Rates to provide you with information about currency exchange products & services from multiple financial institutions.

We will try to show you a range of products & services in response to your request for information. The search results do not include all providers and may not compare all features relevant to you. In giving you product information we are not making any suggestion or recommendation to you about a particular product.

If you decide to conduct foreign exchange you will deal directly with a financial institution, and not with Best Exchange Rates. Rates and product information should be confirmed with the relevant financial institution, see our terms of use for further details.

Best Exchange Rates may receive fees or other benefits in relation to activity on the Best Exchange Rates website. Best Exchange Rates may receive remuneration for vendor referral links. Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.

Read our Full Terms of Service


This website and its contents are the copyright of BEST EXCHANGE RATES PTY LTD © 2009-17. All rights reserved.

Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following. You may print or download contents to a local hard disk for your personal and non-commercial use only. You may copy some extracts only to individual third parties for their personal use, but only if you acknowledge the website as the source of the material.

You may not, except with our express written permission, distribute or commercially exploit the content. You may not transmit it or store it on any other website or other form of electronic retrieval system.

For more details or request distribution right please contacxt us here.