Pound Sterling: GBP Trades Higher after BoE Governor’s Speech
The Pound has held close to opening levels against the Euro today, but has elsewhere advanced against the US Dollar.
The uptick is down to the latest comments from the Bank of England’s (BoE) governor Mark Carney, who has been speaking in Newcastle today.
Mr Carney has raised GBP trader confidence by suggesting that slow UK growth in Q1 2018 was caused by the weather, rather than any underlying economic weakness.
The hope is that an August interest rate hike is now more likely, given Mr Carney’s apparent optimism about the strength of the UK economy.
The next UK data to watch out for will be output stats on Tuesday, which could boost GBP demand if they show as-expected levels of growth during May.
Euro: EUR Advances as Eurozone Retail PMI Rises
Today has been relatively quiet in terms of Eurozone economic data, but the Euro has still advanced against the US Dollar and traded tightly against the Pound.
Overall EUR exchange rate gains are down to the latest Eurozone retail PMI, which showed some growth during June with a rise from 51.7 points to 51.8.
The Euro could extend its recent gains on Friday morning if May’s German industrial production reading shows a forecast-matching (or forecast-beating) rise.
US Dollar: USD Exchange Rates Worsen as US-China Tariffs Loom
The US Dollar has traded tightly against the Pound and fallen against the Euro today, on the eve of the enactment of billions of dollars’ worth of trade tariffs.
The US and China are poised to slap charges on each other on Friday, due to a failure to negotiate a truce between the two nations.
These tariffs threaten to damage US and Chinese businesses, as well as cause knock-on negative effects for other nations.
There is a chance that the US Dollar could recover later today, when US Federal Reserve minutes are released during the evening.
The Fed’s minutes will come from their June meeting, when policymakers voted to hike interest rates.
If the minutes suggest that another rate hike could come in the near-future then the US Dollar could appreciate on USD trader optimism.
Australian Dollar: Worries about US-China Tariffs Lower AUD Demand
There has been little Australian economic data out today, so instead the Australian Dollar has been affected by tensions in the US.
Although US-China tariffs would not directly affect the Australian economy, as China is Australia’s largest trading partner, the tariffs could still cause economic disruption.
Before the tariffs are due to take effect on Friday, the Australian Dollar could next be moved by this evening’s AIG construction index reading for June.
The measurement is predicted to show a small rise in construction sector activity, which could temporarily restore confidence among AUD traders and boost the currency.
New Zealand Dollar: NZD Advances on US Dollar Weakness
Although New Zealand could see future disruption from US trade issues, for now the New Zealand Dollar has advanced against the Pound, Euro and US Dollar.
This strong performance is likely down to the latest deterioration of the US Dollar as there has been limited NZ economic data out recently.
The New Zealand Dollar could see greater gains against its currency peers in the near-term, if Friday’s US-China tariffs lead to major US Dollar losses.
Canadian Dollar: Threat of US Tariffs against Canada Causes CAD Exchange Rate Losses
The Canadian Dollar has been in low demand today, having declined against the Pound, Euro, US Dollar and other regular peers.
This poor performance follows the release of a worrying report on the potential effects of US tariffs against Canada.
CIBC has warned that there could be the lost production of hundreds of thousands of cars in Canada if the US imposes specific tariffs against Canadian vehicles.
While only a hypothetical imposition at this stage, the possibility of major disruption to Canadian automobile manufacturers has still damaged demand for the CAD.
There is the possibility of CAD gains later on this week, however, when jobs market data comes out on Friday.
A surprise drop in the unemployment rate could boost Canadian Dollar demand, as could a forecast-matching rise in the Ivey measure of business activity.
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.
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