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Pound Rises Following Bumper Budget Surplus

#News #AUD #CAD #EUR #GBP #NZD #USD
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Sterling


GBP/USD 1 Week Chart

The Pound (GBP) rose against most of the other majors yesterday as the UK’s latest Public Sector Borrowing figures impressed investors.

The ONS reported that the government’s budget jumped from a deficit of £4.24bn to a surplus of £9.82bn in January, its highest reading in 17 years.

Meanwhile Sterling could advance even further later this morning with the release of the UK’s latest GDP figures, especially if figures exceed expectations.

Euro

The Pound Euro (EUR) exchange rate climbed by around a cent on Tuesday despite some solid data as markets were unsettled by the continued rise of populism in Europe.

Recent polls in France show that Eurosceptic Marine Le Pen its gaining considerable support in France as she capitalises on voters’ security concerns, with Le Pen halving the gap between her and frontrunner Emmanuel Macron over the last couple of weeks.

The single currency may fall even further this morning as Germany’s latest Business Climate report is expected to drop over fears of political instability on the continent.

US Dollar

Sterling rallied by nearly a cent against the US Dollar (USD) yesterday afternoon as US PMIs performed worse than expected.

Markit reported that US Manufacturing activity fell from 55.0 to 54.3 in February, while the services PMI tumbled from 55.6 to 53.9 over the same period. The weak data weighed heavily on the ‘Greenback’ as it caused some investors to cut their odds that the Federal Reserve will raise interest rates in the near future.

However, an expected uptick in Existing Home Sales in January could prompt the US Dollar to rally later this afternoon when the latest data is released.

Canadian Dollar

The Pound Canadian Dollar (CAD) exchange rate rocketed up by around a cent yesterday as the UK’s budget surplus reach a multi-year high.

Meanwhile the ‘Loonie’ was held back by subdued oil prices as fears of rising US production put pressure on crude.

Australian Dollar

Despite advancing overnight on Tuesday the Pound plummeted against the Australian Dollar (AUD) earlier this morning as investors grew concerned that the House of Lords may not seek to amend the government’s Brexit bill.

The ‘Aussie’s accent was also assisted by yet another day of explosive trading on the commodity market, with iron ore jumping over 2% to reach its highest levels since August 2014.

New Zealand Dollar

The Pound New Zealand Dollar (NZD) exchange rate advanced by around half a cent yesterday as the ‘Kiwi’ was pressured by a fall in prices at the latest dairy auction, although Sterling’s weakness this morning allowed it to recoup most of its losses.

 

Further Reading

 

Coronavirus spread fears linger – USD strong – AUD at 11 year lows

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

Coronavirus unnerves currency markets

The strong start to the year for “risk-on” currencies is already a distant memory.

Posted: 3 Feb, 2020

New Year Optimism Retreats on US/Iran Tension

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

  

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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