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Pound (GBP) Exchange Rates Crawl Higher as Markets Respond to US-China Trade Concerns

 

Sterling (GBP) Exchange Rates Climb on Quiet Data Day

The Pound (GBP) hit the ground running this morning, climbing against the majors as markets favoured it over the currently struggling US Dollar (USD) due to ongoing anxieties over China-US trade negotiations.

The overall outlook for Sterling this week is largely positive, despite last week’s disappointing UK services sector readings and a lack of comments pertaining to monetary policy from Bank of England (BoE) Governor Mark Carney.

Keep an eye out for Wednesday’s run of UK data, however, with the trade balance, industrial production, manufacturing production, construction output and the NIESR gross domestic product estimate all liable to cause some movement.

GBP/EUR Exchange Rate Inches Ahead as German Trade Balance Disappoints

The Pound Euro (GBP/EUR) exchange rate was up on Monday morning, supported by yet another below-forecast data release from Germany.

According to the Federal Statistical Office, the German trade surplus printed at €18.4bn in February, below the expected €20.0bn.

This was due to a 3.2% drop in exports and a 1.3% drop in imports and marked another disappointing month for German industry, with last week’s German industrial production and factory order figures also seeing notable declines.

US Pushing China for Serious Negotiations on Trade – US Dollar (USD) Sheds Gains

The US Dollar (USD) continued to come under pressure due to ongoing trade negotiations between the US and China.

Top US economic advisor, Larry Kudlow has downplayed the tariff threats as simply being ‘part of the process’, whilst also arguing that the measures are entirely necessary in order to confront 20 years of ‘unfair’ and ‘illegal’ trading practices from the superpower.

Investors, fearing trade intervention and the prospect of a global trade war continue to remain anxious of escalations, however, with China’s response liable to kick the ‘Greenback’ up or down.

Wednesday will also feature the US consumer price inflation readings for March, and well as the Federal Open Market Committee (FOMC) meeting minutes, which could reveal a push (or general eagerness) for four rate hikes this year, rather than three.

GBP/CAD Exchange Rate up – No NAFTA Deal Announcement Expected at Lima Summit

The Pound Canadian Dollar (GBP/CAD) exchange rate climbed on Monday as markets responded to reports that no NAFTA deal is expected to be announced at the Lima summit.

Whilst progress has been made on the renewal of the accord, reports from Reuters suggest that there is still too much to do before an unveiling.

Nonetheless, if negotiations continue advancing then a deal might be possible by the end of April or early May, with US President Donald Trump asserting that the three countries are working ‘very hard’ and that he expects something ‘fairly soon’.

This week’s calendar is a rather quiet one for the ‘Loonie’, but Wednesday’s US consumer price inflation results could kick CAD up or down.

GBP/AUD Exchange Rate Inches Higher – US-China Trade Expected to be Lead Driver

The ‘Aussie’ Dollar is expected to trade defensively this week, with US/China trade uncertainties liable to keep the high-risk Australian Dollar on a cautious footing.

On the data front, Australia’s NAB business confidence reading for March, (due on Tuesday) is expected to rise from 9 to 12 – an event that could give AUD a little push, as could the Westpac consumer confidence index for April (due on Wednesday).

Beyond this, Reserve Bank of Australia (RBA) Governor Philip Lowe is expected to give a speech on the same day, with any indication of caution liable to give GBP/AUD even more of a boost.

GBP/NZD Exchange Rate Slips on Rise in Whole Milk Powder

The price of dairy products as a whole may have weakened at last week’s global dairy trade price auction, but New Zealand’s primary export, whole milk powder, saw a rise.

This news may have contributed to the struggle of GBP/NZD this morning, with investors optimistic that the higher whole milk powder price will benefit the New Zealand economy.

The data calendar for New Zealand this week is rather sparse, but the NZIER business confidence reading, due later today could push GBP/NZD up or down.

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