The Pound (GBP) had a mixed day against the other majors on Wednesday as investors were unsettled by comments from Chancellor Philip Hammond regarding the government’s lack of plans for a ‘no deal’ Brexit.
Sterling may fare a little better today however as investors await a speech from Bank of England Chief Economists Andy Haldane, with any indication that the prominent BoE policymaker supports a November rate hike likely to cause the Pound to surge.
The ongoing political uncertainty in Spain caused the Pound Euro (GBP EUR) exchange rate to fluctuate wildly yesterday, with the pairing at one point relinquishing the entirety of its weekly gains on hopes that talks between the Catalan and Spanish government may be possible.
However, the single currency appeared to retreat almost as fast as it advanced in overnight trade as Spanish Prime Minister Mariano Rajoy’s suggestion that he could strip Catalonia of its autonomy caused tensions to surge once again.
Meanwhile, the rollercoaster may continue again later this afternoon following a speech by Mario Draghi, with any hints from the European Central Bank (ECB) President that the bank plans to taper its stimulus programme next year likely to cause the Euro to rise once again.
Sterling pushed higher against the US Dollar (USD) late on Wednesday as the latest FOMC minutes revealed that Federal Reserve officials remain concerned over inflation.
While investors were relieved to see that the bank is still targeting a rate hike in December, they were a little concerned by suggestions from policymakers that low inflation may not be temporary.
However, the ‘Greenback’ may attempt to rally later this afternoon as economists forecast that the US Producer Price Index will have ticked higher again in September.
Volatility in oil prices caused the Pound Canadian Dollar (GBP CAD) exchange rate to fluctuate yesterday as the commodity’s early gains were ceded following a surprise uptick in US crude inventories.
Sterling fell back from a weekly high against the Australian Dollar (AUD) overnight on Wednesday as the ‘Aussie’ was strengthened by the weaker US Dollar and a better than expected domestic housing finance report.
New Zealand Dollar
The Pound New Zealand Dollar (GBP NZD) exchange rate also tumbled from its best levels during the Asian session last night as the ‘Kiwi’ attracted investors fleeing the US Dollar in the wake of the dovish Fed minutes.
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