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Pound (GBP) Inches Ahead as BoE Plans to Offer EU Banks Continued Access to UK

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Pound Sterling Exchange Rates Supported by Latest Brexit Developments

The Pound took a slight lead against the majors on Wednesday morning as investors reacted to news that the Bank of England (BoE) is planning on allowing European banks continued access to the UK.

This offer would allow EU banks to provide money and services to businesses and each other for the foreseeable future, under the current rules, with a failure to reach a post-Brexit trade deal not liable to change this.

Ultimately, however, the BoE is seeking to preserve jobs, tax revenues for the City of London and the UK’s export figures, with services that EU banks provide overseas counted amongst the UK’s total export numbers.

In other news, EU Chief Negotiator Michel Barnier has insisted that the Brexit transition period should last no later than the 31st of December 2020, with the UK set to retain both the benefits and the obligations of being in the EU during this period.

GBP EUR Exchange Rate Edges Higher

The Pound Euro exchange rate inched ahead on Wednesday morning with domestic data from the bloc proving disappointing.

The Eurozone’s current account surplus was revealed to have narrowed in October, with the net export of goods dropping, according to figures from the European Central Bank (ECB)

In other news, German year-on-year producer prices were demonstrated to have risen by 2.5% in November, down from the previous period’s 2.7% increase and missing the market expectation of 2.6%.

This was the lowest producer price reading that Germany has recorded since July this year.

GBP USD Exchange Rate Climbs Despite Trump Tax Vote Success

In his first major legislative triumph, US President Donald Trump’s sweeping tax overhaul officially cleared the House of Representatives late on Tuesday, with the Senate narrowly approving the bill on a vote of 51-48.

This rewrite of the US tax code is the most significant seen in perhaps three decades, with dramatic tax breaks for corporations and families at all income levels.

It should be noted, however, that the final approval of the legislation must be made by the House on Wednesday as an element of procedure.

After this is complete, the tax bill will be written into law.

This failed to bolster the ‘Greenback’, however, with the long-running anticipation of this result seemingly already priced in by the markets.

GBP CAD Exchange Rate Steadies on Crude Oil Price Surge

Oil prices rose on Wednesday, supported by expectations of a fall in US inventories, the continued dysfunction of the North Sea pipeline and strikes within the Nigerian energy sector.

This soon bolstered the oil-loving ‘Loonie’ and prevented the Pound from taking the lead.

Market attention will turn tomorrow to Canada’s consumer price data, with an estimated rise of 2.0%, up from the previous 1.4%. If this increase does occur, the Bank of Canada (BoC) may be prompted to resume its run of rate hikes, a possibility that will likely give the Canadian Dollar even more purchase.

GBP AUD Exchange Rate Remains Weak on RBA Optimism

The Pound remained weak against the Australian Dollar on Wednesday, with the current softness of the US Dollar allowing its ‘Aussie’ counterpart to extend its gains.

There is some debate as to why exactly the US Dollar has not seen much movement on the successful US tax reform vote, with parties proclaiming on one hand that the decision was anticipated for so long that it was likely already priced in, and on the other; that investors were, perhaps, not hopeful that the decision would result in much benefit for the US economy.

The Australian Dollar also continues to benefit from the recent upbeat Reserve Bank of Australia (RBA) minutes.

GBP NZD Exchange Rate Steadies Despite Fall in Dairy Prices

The Pound New Zealand Dollar exchange rate steadied on Wednesday, despite news that global dairy prices fell some -3.9%.

This was primarily due to some upbeat NZ credit card spending figures, with the year-on-year print in November hitting 9.1%, up from the previous period’s 3.0%.

Markets are slightly anxious regarding tonight’s release of New Zealand’s gross domestic product figures, however, with a drop forecast from 2.5% to 2.4% year-on-year in the third quarter, and a drop from 0.8% to 0.6% expected quarter-on-quarter.

 

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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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