Pound Exchange Rates Fluctuate on Public Borrowing Figures
The Pound initially climbed against the majors on Thursday as markets reacted to news that public sector net borrowing in the UK decreased in November.
Figures from the Office for National Statistics (ONS) revealed that British public sector net borrowing is on track to meet fiscal targets for 2017/18, having fallen to -£3.12bn, down from the previous period’s -£8.23bn and below the market forecast of -£8.30bn.
This marked the lowest November total in a decade.
In other news, consumer confidence in the UK fell to a four-year low in December – according to market research company GfK – with a print of -13, down from the previous -12 and missing the market expectation that it would remain steady.
This did not last into the afternoon, however, with Brexit negotiation concerns quickly dragging the Pound back down.
GBP EUR Exchange Rate Fluctuates on Quiet Data Day for the Bloc
Thursday has been a relatively quiet day for the currency bloc, with the only pertinent domestic data release liable to be the Eurozone consumer confidence reading, due later today.
Germany continues to suffer the encumbrance of not having an effective government, however, with the void perhaps felt the most in businesses (reflected in the recent poor IFO business climate and expectation readings).
Friday will feature French GDP readings, as well as the German GfK consumer confidence assessment, but barring these, markets will be primarily concerned with the UK’s GDP reading, current account balance, index of services and total business investment figures.
GBP USD Falls in Afternoon on Robust Philadelphia Fed Business Outlook
The Pound US Dollar (GBP USD) exchange rate fell into the afternoon on Thursday, with an upbeat outlook from the Philadelphia Fed bolstering the ‘Greenback’.
The Fed’s manufacturing business outlook survey climbed to a reading of 26.2 in December, up from the previous period’s 22.7 and smashing the forecast of a downtick to 21.8.
GBP CAD Tumbles as Canadian Inflation Beats Forecasts
Inflation in Canada jumped above the Bank of Canada’s (BoC) target of 2%, with the nation’s economy showing positive signs of price pressures.
Consumer prices increased at a year-on-year rate of 2.1% in November, up from October’s 1.4% and above the consensus of 2%, with acceleration in seven out of eight components of the index (although transportation and shelter demonstrated the biggest rises).
This news could push the central bank back towards its run of rate hikes in 2018 – a prospect that drove demand for the ‘Loonie’ soaring.
GBP AUD Exchange Rate Falls Despite Gloomy Commodity Forecast
The Pound Australian Dollar exchange rate similarly tumbled on Thursday, with the poor UK GfK consumer sentiment reading and Brexit trade talk delays continuing to encumber the Pound.
In other news, the Australian Dollar seemed largely unperturbed by the latest gloomy Westpac Bank commodity forecast, which prognosticated that iron and coal markets would soften in 2018.
Whilst this forecast did upgrade its near-term forecasts for Australia’s 2 primary commodities, it warned that iron ore could see significant losses in the coming months.
GBP NZD Remains Steady on Mixed NZ GDP Results
The Pound New Zealand Dollar exchange rate traded within a relatively narrow band on Thursday despite New Zealand’s recent better-than-expected GDP reading.
New Zealand’s economy expanded at a rate of 2.7% year-on-year, below the previous period’s 2.8% but above the forecast of 2.4%.
Whilst the result was better than expected, the deceleration in growth still limited the ‘Kiwi’ Dollar, with this being the first GDP reading released since the Labour led coalition took office.
For some economists, it signifies that the new leadership could struggle with slowing economic growth in 2018.
This week the US Dollar was touching three-year highs when valued against a basket of major currencies. The greenback’s traditional role as one of the safe-haven currencies is helped by a domestic economy that is largely immune to the threats of the coronavirus.
Last update: 22 Feb, 2020
The strong start to the year for “risk-on” currencies is already a distant memory.
Posted: 3 Feb, 2020
The threat of a proxy war between the US and Iran in Iraq has pared back some of the recent gains of “risk-on” currencies.
Last update: 8 Jan, 2020