The Pound (GBP) tumbled against the other majors yesterday as the UK’s latest growth report painted a gloomy picture for 2017.
While fourth Quarter GDP figures saw a slight uptick, rising from 0.6% to 0.7%, Sterling fell as economists predicted that growth would slow in 2017. Meanwhile, investors were also concerned about the drop in UK business investment as it fell from 0.4% to -1% over the same period.
The Pound may mount a recovery later this morning however if the CBI retail sales index rises in February as expected.
The Pound Euro (EUR) exchange rate fell by around a cent from its best levels on Wednesday as upbeat Eurozone data helped the single currency rally from its weekly low.
EUR rose as German Business Climate data beat expectations to climb from 109.9 to 111, allaying fears that political uncertainty was having an impact on business sentiment.
However, a worse than expected drop in German Consumer confidence this morning could see the Euro relinquish some of yesterday’s gains.
Sterling softened against the US Dollar (USD) yesterday as the minutes from the latest Federal Reserve interest rate decision showed that many members expect the next interest rate hike to come ‘fairly soon’.
While the reception to the minutes was lukewarm at best, as investors fear the uncertainty of Trump’s economic plans will prevent any sudden moves by the Fed, it was enough to allow the ‘Greenback’ to exploit the weakness in the Pound.
USD may be allowed to extend its gains later this afternoon as Continuing Jobless Claims are predicted to have fallen from 2076k to 2068k in February, although a slight uptick in new claims could hinder its advance.
The GBP CAD exchange rate dropped by nearly a cent yesterday as predictions that UK growth would slump in 2017 caused the Pound to weaken.
However, Sterling mounted a recovery this morning as Canada’s disappointing retail sales on Wednesday and subdued oil prices prevented the Canadian Dollar from stabilising at its best levels.
The Pound Australian Dollar (AUD) exchange rate fluctuated wildly overnight as Australian Capital Expenditure fell short of expectations.
Meanwhile the recent rise in iron ore prices came to an abrupt halt yesterday as a warning over the demand for steel grounded trading.
New Zealand Dollar
Sterling plummeted nearly two cents from its best levels against the New Zealand Dollar (NZD) on Wednesday as the slump in UK business investment caused traders to shy away from the Pound.
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
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