Investor Anticipation for an August BoE Rate Rise Increases – Pound (GBP) Exchange Rates Rise
Sterling (GBP) posted a mixed performance against the majors on Friday morning, steadying against the Euro and the Australian Dollar whilst rising against the ‘Greenback’ and the Canadian Dollar.
Investors remained rather upbeat about the trajectory of the Pound, with news yesterday that Bank of England (BoE) Chief Economist Andy Haldane had voted in favour of an immediate rate rise, thus nurturing investor hopes for an increase in August.
GBP/EUR Exchange Rate Softer – Eurozone PMIs Beat Expectations
The Pound Euro (GBP/EUR) exchange rate traded lower this morning, slipping as investors responded to an upbeat run of Eurozone PMI results for June.
IHS Markit’s latest composite PMI reading printed at 54.8 in June, up from the previous period’s 54.1 and the forecast of 53.9.
This was largely driven by a recovery in service sector activity.
Despite the rise, optimism amongst businesses in Germany, for example, continues to dwindle, with concerns regarding global trade relations weighing on confidence.
GBP/USD Exchange Rate Up as Philly Fed Manufacturing Index Disappoints
The US Dollar (USD) came under significant pressure this morning, pulling back from recent highs as traders responded to a sharp fall in the Philadelphia Fed’s manufacturing index.
The index – a measure of manufacturing activity and sentiment – fell from 34.4 to 19.9 in June, far below the forecast of 28.
This fall was due to a marked drop in new orders and activity expectations for the next six months, with concerns regarding the trade tariff exchange with China and the EU hurting optimism.
Looking ahead, today will feature a number of US PMI results for June.
If these disappoint then we could see GBP/USD trade even higher as the week draws to a close.
Canadian Dollar (CAD) Outlook Mixed on OPEC Supply Increase Plans
The outlook for the Canadian Dollar (CAD) exchange rate remained mixed today as investors responded to a 1.3% rise in crude oil prices and news that an OPEC supply increase is definitely on the cards.
Investors are currently digesting today’s OPEC meeting, with some members of the group claiming that an increase in production is likely.
Saudi Arabia’s Al-Falih has reassured markets, however, by claiming that any oil supply increase will be gradual, and that markets should not expect to see an immediate flood of oil onto the market.
Looking ahead, investors will soon be responding to Canada’s consumer price inflation and retail sales figures, with a forecast rise in prices from 2.2% to 2.6% in May expected to give the ‘Loonie’ a bit of a lift.
GBP/AUD Exchange Rate Down as Australian Dollar Rebounds
The Pound Australian Dollar (GBP/AUD) exchange rate stumbled into the end of the week, falling as the ‘Aussie’ Dollar capitalised on a weaker USD.
The medium-term outlook for the Australian Dollar is one of volatility, with concerns regarding global trade and a hawkish Fed liable to keep knocking it back into the doldrums.
GBP/NZD Exchange Rate Slides despite Weaker NZ Credit Card Spending
The GBP/NZD exchange rate traded slightly lower today as investors favoured the ‘Kiwi’ Dollar thanks to the current weakness of its US counterpart.
NZ data today was less than positive, however.
According to the Reserve Bank of New Zealand, credit card spending in the nation decreased for the first time in four months in May, falling from 7.0% to 3.7%.
This release paled in comparison to the weaker NZ GDP result and falling dairy prices, however, with the near-term outlook for the ‘Kiwi’ Dollar remaining poor.
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
Key Takeaways from the ACCC inquiry into currency conversion services. BestExchangeRates referenced among comparison sites playing an important role in customer awareness of the excessive currency margins charged by banks.
Last update: 11 Dec, 2019
Both the Australian dollar and British pound sterling have had a hard time of late caught between the rock of the China/US trade war and the Brexit hard place.
Last update: 7 Jan, 2020