Pound Sterling: GBP Appreciates after Positive UK GDP Stats
The Pound has largely been supported by residual GBP trader optimism today, appreciating against the Euro and other peers but dipping against the US Dollar.
This movement has been caused by Tuesday’s UK GDP data, which proved supportive by showing tentative growth during May compared to April.
There has been additional support from National Institute for Economic and Social Research (NIESR) GDP estimates for Q2 2018, with growth levels tipped to rise from 0.2% to 0.4%.
Looking ahead, the Pound could make more consistent gains on Friday if Bank of England (BoE) official Jon Cunliffe speaks in favour of higher UK interest rates in 2018.
Euro: EUR Trading Mixed ahead of NATO Summit
The Euro has fallen against the Pound and US Dollar today, but has otherwise appreciated against currencies like the Australian Dollar and South African Rand.
As with the Pound, this is mainly down to a continued reaction to Tuesday’s news as there hasn’t been much high-impact Eurozone data out today.
Yesterday saw the ZEW surveys of German economic confidence decline in July by more than forecast.
Today could see the Euro tumble if a NATO summit goes poorly.
US President Donald Trump is attending and has made combative remarks about spending, so there could be fears stoked among Euro traders if Mr Trump takes aim at EU and Eurozone NATO members.
US Dollar: USD in High Demand as US-China Trade War Intensifies
The US Dollar has risen in value against most currency peers today following the revelation of plans to increase tariffs against the import of Chinese goods.
This represents a significant escalation in the already significant US-China trade war and is seen by some as a decisive step – China imports fewer goods from the US so cannot match this with like-for-like tariffs.
Although the news has done nothing to reassure USD traders, the US currency has still appreciated on falling risk sentiment.
The US Dollar could make greater gains this afternoon when US crude oil stock data comes out; this is expected to show falling reserves which could boost prices for US oil exporters.
Australian Dollar: AUD Fails to Advance despite Rising Consumer Confidence
The Australian Dollar has been in low demand today, falling against the Pound, Euro and US Dollar and only advancing against the weaker Chinese Yuan.
This poor performance is mainly down to low risk sentiment among currency traders, which has led to increased demand for more stable currencies, such as the US Dollar.
The latest Australian data has been positive, but has failed to enable AUD exchange rate gains.
This took the form of Westpac’s consumer confidence index for July, which has shown higher levels of optimism, with a rise from 102.2 points in June to 106.1.
With no major Australian data out until next week, US Dollar movements will likely determine AUD exchange rate movement in the near-term.
New Zealand Dollar: NZD Sees Losses on USD Strength
Like the Australian Dollar, the New Zealand Dollar has made losses against most currency peers today on the US Dollar strengthening.
The next NZ economic data to watch out for will come on Thursday evening, and consists of a manufacturing sector activity reading for June.
The reading is predicted to show growth during the month, which could be enough to cause late-week NZD exchange rate gains.
Canadian Dollar: CAD Dips ahead of Key BoC Interest Rate Decision
The Canadian Dollar has declined against the Pound, Euro and US Dollar today, ahead of the afternoon’s key Bank of Canada (BOC) interest rate decision.
BOC policymakers are widely expected to hike interest rates from 1.25% to 1.5%, which is likely to boost the Canadian Dollar.
Today’s poor CAD trading was down to underlying fears that the BoC will instead leave interest rates unchanged, potentially due to worries about trade tariffs harming Canada.
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
Both the Australian dollar and British pound sterling have had a hard time of late caught between the rock of the China/US trade war and the Brexit hard place.
Last update: 7 Jan, 2020
The RBA has cut Australian interest rates to a record low of 1 percent in an effort to boost inflation. The Australian dollar is slightly stronger following the widely expected decision but is expected to lose 5–7 percent of its value before year-end.
Last update: 7 Jan, 2020