The Pound (GBP) slumped against the other majors on Tuesday as comments by Bank of England (BoE) Governor Mark Carney sowed doubts over the bank’s possible plans to raise interest rates next month.
Sterling was also weakened by the release of the UK’s latest CPI figures yesterday as another uptick in inflation caused concerns that the gap between inflation and wage growth is widening yet again.
Meanwhile the publishing of the UK’s latest employment data could cause the Pound to slide even further later this morning as economists predict that average earnings will have slipped slightly in August.
The Pound Euro (GBP EUR) exchange rate tumbled over half a cent on Tuesday as markets reacted negatively to Carney’s comments that the next rate hike may still be some way off.
The single currency was also strengthened by Germany’s latest Economic Sentiment Index as it rose from 17 to 17.6 in October, although it fell below market expectations of a more impressive rise to 20.
Meanwhile EUR investors are likely to focus on a speech by European Central Bank (ECB) president Mario Draghi this morning, with markets hoping to hear about the bank’s stimulus plans next year.
Sterling nosedived against the US Dollar (USD) yesterday morning as Carney’s dovish comments regarding Brexit and future rate hikes caused investors to flee the UK currency.
Also bolstering the ‘Greenback’ yesterday was the release of the latest US industrial production figures as they revealed that output grew by 0.3% in September after declining by 0.7% the month before.
The upbeat production figures prompted further speculation that the Federal Reserve will raise interest rates later this year, with the odds of a December rate hike climbing to 91% according the CME’s FedWatch tool.
The Pound Canadian Dollar (GBP CAD) exchange rate plummeted by over a cent on Tuesday as the ‘Loonie’ was reports that NAFTA talks would be extended into next year, quelling fears that the agreement was close to being scrapped following recent comments from Trump.
Sterling fell close to a one-month low against the Australian Dollar (AUD) overnight as Mark Carney’s refusal to commit to a November rate hike caused investors to turn on the Pound.
However the ‘Aussie’ may slip later tonight as economists predict that Australia’s latest employment data will show that the number of Australian’s entering work slowed dramatically in September
New Zealand Dollar
After retreating over a cent yesterday morning the Pound New Zealand Dollar (GBP NZD) exchange rate began to trend higher again overnight as the ‘Kiwi’ was pressured by another decline in dairy prices.