After plummeting at the tail end of last week the following the Bank of England’s (BoE) rate decision, the Pound (GBP) remains subdued in early trading this morning as investors continue to reflect on the dovish outlook from the bank.
Even the release of a better than expected Services PMI proved to do little to improve the Pound’s fortunes on Friday as investors remained focused on the BoE’s policy meeting.
Sterling sentiment may tumble again later today as Prime Minister Theresa May speaks at a Confederation of British Industry (CBI) conference, in which she is expected to tell those attending that the government will not protect the UK economy from market forces after Brexit.
The Pound Euro (GBP EUR) exchange rate closed the week around half a cent down on Friday having made only a slight recovery after the dovish BoE policy meeting caused the paring to shed almost two cents on Thursday.
However, the single currency is showing resistance against any further advances from Sterling this morning as German Factory Orders slowed less than expected in September.
Sterling remains on the back foot at the start of this week after slumping to a one-month low against the US Dollar (USD) last Thursday.
The pairing plummeted over two cents last week as the BoE signalled that November’s rate hike would not be the start of a new tightening cycle and that further hikes would be gradual.
Meanwhile, the ‘Greenback’ was also strengthened late last week as Trump announced that Jerome Powell would be the next chair of the Federal Reserve, with investors seeing him as a safe pair of hands and likely to continue with Janet Yellen’s slow but steady approach to monetary tightening.
The Pound Canadian Dollar (GBP CAD) exchange rate tumbled again on Friday, extending its losses from Thursday as Canada’s latest labour report impressed investors.
Despite the jobless rate rising slightly as participation rose, employment increased from 10,000 to 35,300 in October, beating expectations of a more modest rise of 15,000.
Sterling did manage to mount a notable recovery against the Australian Dollar (AUD) at the end of last week, however, with the pairing recouping around half of Thursday’s losses as Australia’s latest retail sales figures disappointed.
New Zealand Dollar
The Pound New Zealand Dollar (GBP NZD) exchange rate is showing signs of life at the start of this week’s session with the paring climbing around half a cent as the ‘Kiwi’ was weakened by a slight dip in business inflation expectations for the fourth quarter.
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