Commodity Based Currencies Bolstered by Uptick in Oil Prices

#News #AUD #CAD #Energy #EUR #GBP #NZD #USD
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After a brief rally against the majority of its peers yesterday morning the Pound (GBP) tumbled by the afternoon over new Brexit concerns.

Sterling’s weakness was prompted by a report from BlueBay Asset Management who told traders that they should bet against the Pound as they predict turbulent Brexit negotiations will cause it to fall to $1.20 against the US Dollar (USD) by the end of the year.

The Pound is likely to be sent even lower later this morning, with the release of the UK’s latest first quarter GDP estimate, which is expected to confirm that growth slowed from 0.7% to 0.3% at the start of the year.


The Pound Euro (GBP EUR) exchange rate slipped from its best levels on Wednesday as market fears over Brexit weighed on the pairing.

However the Euro’s advance was slowed somewhat in the early afternoon as European Central Bank (ECB) President Mario Draghi told investors that the Bank remained committed to its stimulus plans and that he saw no point in deviating at this time.

The single currency was strengthened further this morning by the release of Spain’s latest GDP print, which unexpectedly climbed from 0.7% to 0.8% in the first quarter.

US Dollar

After stumbling against the US Dollar for much of Wednesday, Sterling managed to rally in the afternoon following the release of dovish FOMC minutes.

The ‘Greenback’ failed to hold on to its gains yesterday after the minutes from the latest Federal Reserve policy meeting suggested a more dovish approach to rate hikes this year, saying that it would be ‘prudent to await additional evidence’ before tightening monetary policy, leading bets for a June rate hike to slide.

Canadian Dollar

The Pound Canadian Dollar (GBP CAD) exchange rate plummeted over a cent on Wednesday as markets reacted positively to the tone of the Bank of Canada’s (BoC) latest policy meeting, which hinted towards a possible rate hike in the future.

Meanwhile the ‘Loonie’ is likely to find further strength today as OPEC meets to discuss the extension of its production cuts, with oil prices likely to continue rising if the group reaches a new agreement.

Australian Dollar

Sterling slumped against the Australian Dollar (AUD) overnight on Wednesday following the dovish fed minutes, with the subsequent fall in USD making the ‘Aussie’ more attractive to investors.

New Zealand Dollar

It was a similar story for the Pound New Zealand Dollar (GBP NZD) exchange rate yesterday as the ‘Kiwi’ was bolstered by the weakness in the US Dollar and broader strength in commodity markets following the rise in oil.


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Posted to: News

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.

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