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Pound Holds onto Gains despite Slide in Lower UK Confidence

Categories: AUD, CAD, EUR, GBP, Markets, News, NZD, USD

Pound Sterling (GBP)

GBP/USD 1 Week Chart

The Pound is trading close to Monday’s highs against the Euro and US Dollar today.

While there is still background confidence for a Bank of England (BoE) interest rate hike on Thursday, Sterling’s strength was undermined by some disappointing domestic news.

The GfK consumer confidence score for October has dropped from -9 points to -10, showing growing uncertainty among consumers.

Before Thursday’s key BoE rate decision, the Pound could be affected by a manufacturing activity reading on Wednesday.

This is expected to show a minimal dip in October, which might cause a minor Pound decline ahead of the interest rate meeting.


Euro (EUR)

Ahead of a spate of high-impact Eurozone data releases, the Euro has traded tightly against most peers.

Annual GDP is forecast to slow, but core inflation is tipped to rise and the region’s unemployment rate is expected to fall. If the Eurozone reports prove positive, the common currency could strengthen across the board.


US Dollar (USD)

Although there have been concerning political developments in the US this week, the US Dollar has continued to trade higher against the Euro and Pound.

This advance comes because of trader hopes for a change of tact in the Federal Reserve, when Donald Trump announces his pick for the next leader on Thursday.

Before then, USD movement could follow Wednesday’s Federal Reserve interest rate decision.

The Fed isn’t expected to change interest rates, but suggestions that a December interest rate hike is still on the cards would be US Dollar-supportive.


Australian Dollar (AUD)

The Australian Dollar has tumbled today, posting losses across the board after Chinese data showed that manufacturing and non-manufacturing activity slowed by more-than-expected in October.

The Australian Dollar might be affected by tonight’s manufacturing index score, which is projected to show a minor increase in activity.


New Zealand Dollar (NZD)

The New Zealand Dollar has fallen against most peers today.

Previously, NZD dropped sharply because of proposals for a change in government spending under the new leadership.

The latest negative news has seen a -2.3% reduction in building permits granted, in addition to a -10.1% drop in business confidence.

The New Zealand Dollar might bounce back after tonight’s unemployment rate figures, which are set to show a change from 4.8% to 4.7%.


Canadian Dollar (CAD)

The Canadian Dollar has fallen against the Pound, Euro and US Dollar today, but has risen against the weaker Australian Dollar and New Zealand Dollar.

A decline in crude oil prices might have triggered this downturn, although there is also uncertainty about an upcoming GDP print.

Expectations are for a minimal 0.1% level of growth in August, which would only just be an improvement on the previous 0% stagnation.

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

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