Pound Sterling (GBP) Exchange Rate Plummets Following Dovish BoE Rate Claims
The Pound (GBP) weakened considerably against almost all major currencies despite the Bank of England (BoE) raising interest rates for just the second time in almost a decade.
A vote of 9-0 among the policymakers of the Monetary Policy Committee was initially believed to be a switch to a hawkish stance of regularly raising the rate in the future, but BoE Governor Mark Carney cautiously specified this may be the only rate hike for a while.
Despite data today indicating a decrease in the UK’s services PMI for July, Sterling is holding steady against the majority of its peers.
GBP/EUR Exchange Rate Volatile amid BoE Fallout and Safe-Haven Demand
The gains made by Sterling in Wednesday’s session were lost yesterday after the BoE decision, forcing the Pound Euro (GBP/EUR) exchange rate to retreat.
The Euro’s growth was stilted, however, by a surge in US Dollar (USD) strength following some impressive US data, as well as on escalating trade fears.
The single currency was not aided today either by below-forecast retail sales figures, which left EUR on relatively even terms with GBP.
GBP/USD Exchange Rate Nosedives on Mounting Trade War Worries
The Pound US Dollar (GBP/USD) exchange rate sank yesterday following revived fears of a US-China trade war, provoking investors to turn to the safe haven ‘Greenback’.
Also aiding USD appreciation was an uptick in the latest US factory orders data for June.
The US Dollar is forecast to receive another favourable boost this afternoon, with payrolls figures for July earmarked for an increase along with a potential, but minor, decrease in the unemployment rate.
GBP/CAD Exchange Rate Disappoints despite Trade Tensions
The Pound Canadian Dollar (GBP/CAD) exchange rate hit its lowest figure in seven months on Thursday, with the ‘Loonie’s’ poor form stemming from trade tensions.
Today’s session may see the Canadian Dollar lose some of the gains made yesterday however, following reports that Canada’s trade balance has lurched further into the red.
GBP/AUD Exchange Rate Dips following Favourable Australian Retail Sales
The Pound Australian Dollar (GBP/AUD) exchange rate fell on Wednesday but was not held down for long, as some better-than-expected Australian retail sales figures for June aided the ‘Aussie’ in bouncing back.
GBP/NZD Exchange Rate Steady amid Falling Risk Appetite
Despite the Pound New Zealand Dollar (GBP/NZD) exchange rate weakening following the BoE’s interest rate decision, Sterling managed to slingshot back to a similar position against the New Zealand Dollar as investors shied away from the risk-correlated ‘Kiwi’.
Currency rates were extremely volatile last week as the coronavirus situation worsened day by day with various countries implementing ever-tougher measures to stop the spread of the disease.
Last update: 23 Mar, 2020
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
The strong start to the year for “risk-on” currencies is already a distant memory.
Posted: 3 Feb, 2020