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Pound Tumbles Against Euro Following First Round of French Election

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


GBP/USD 1 Week Chart

The Pound (GBP) had a mixed start to this week’s session but sentiment remained largely upbeat following Prime Minister Theresa May’s call for an early general election in June.

Analysts expect the early election will lead to greater Conservative majority in parliament, allowing May to pursue her plans to leave the single market without any major resistance and strengthening her hand in Brexit negotiations.

However Sterling may begin to slide later his morning as economists predict that the UK’s Industrial Trends Orders will begin to retreat this month, falling from a high of 8 in March to 5 in April.

Euro

The Pound Euro (GBP EUR) exchange rate plummeted this morning as EUR investors reacted positively to the performance of independent candidate Emmanuel Macron in the first round of voting for the French presidential election.

Macron won 23.8% of the vote, with the far-right Eurosceptic Marine Le Pen just behind him with 21.5%. The two candidates will now go head-to-head in the second round of voting to be held on the 7th of May, with recent polls suggesting that the Pro-EU Macron will claim victory with around 60% of the vote.

The single currency was also strengthened this morning by the release of Germany’s Business confidence figures as sentiment rose from 112.4 to 112.9 in April, thanks to a better than expected outlook from Germany’s retail sector.

US Dollar

Sterling held against the US Dollar (USD) this morning as investors begin to reflect on Donald Trump’s first 100 days in office.

Markets are becoming increasingly impatient by his administration’s lack of progress towards his ambitious economic reforms, with Trump having so far accomplished little of what he set out to do since his inauguration in January.

However, the ‘Greenback’ may push higher later this afternoon following the release of the Fed Manufacturing Index, with activity expected to see a slight rise from 16.9 to 17.0 in April.

Canadian Dollar

The Pound Canadian Dollar (GBP CAD) exchange rate began to trend lower this morning as oil prices began to rebound from last week’s 7% drop, with expectations that OPEC will extend its production cuts to the end of the year, prompting crude futures to rise around 0.5%, causing the oil-correlated ‘Loonie’ to strengthen.

Australian Dollar

Sterling also tumbled against the Australia Dollar (AUD) this morning as Investment bank UBS claimed that the Australian housing market had likely peaked after months of property prices rocketing higher.

Analysts predict the slowdown will begin over the next few years, with price growth expected to slow from 7% to 3% over the next 12 months. With the Reserve Bank of Australia (RBA) frequently attributing its cautious outlook to surging house prices, a slowdown could prompt the Bank to raise interest rates.

New Zealand Dollar

The GBP NZD exchange rate continues to trend flatly as a lack of domestic data for the New Zealand Dollar provides little direction for the pairing.

 

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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