Sterling
Sterling failed to make any inroads against most of the majors on Friday as a 14-month low consumer confidence report piled more pressure on the downtrodden currency.
The GfK sentiment index cooled from 4.0 to 0.0, confounding expectations of 3.0, as ‘Brexit’ fears and concerns regarding the state of the global economy weighed on the consumer outlook, even though inflation is running close to zero and wages are finally beginning to rise.
UK Chancellor George Osborne cited the current unstable economic climate as reason to believe that now is the ‘worst time for UK to take gamble of EU exit’. Osborne warned that jobs livelihoods and living standards could be impacted by a vote to leave the European Union.
Euro
The Pound rose minimally but remained close to a 14-month low against the Euro at the end of last week’s session.
Data in Europe showed that German inflation flatlined in February and Spain and France suffered disinflationary scores of -0.9% and -0.1%, respectively. The slide in consumer prices caused the single currency to depreciate slightly because analysts concluded that deflation fears could persuade the European Central Bank to act decisively in March.
This morning’s print is tipped to see the Eurozone CPI index sink from 0.3% to 0.0% but anything below zero could stoke ECB stimulus bets and subsequently act as a drag on the Euro.
US Dollar
The Pound to US Dollar exchange rate tumbled more than a cent to a fresh seven-year low on Friday as US GDP beat expectations.
The fourth quarter US growth score was revised up from 0.7% to 1.0% on Friday afternoon as business inventories came in higher-than-anticipated. The result moved the market because investors had been primed for a negative revision to 0.4%. GBP/USD also suffered at the hands of a better-than-forecast 0.5% rise in consumer spending, which helped lift Federal Reserve rate hike expectations.
Canadian Dollar
Sterling slumped -150 pips against the Canadian Dollar on Friday to strike a fresh nine-month low thanks to a mixture of ‘Brexit’ fears and OPEC production cut hopes.
Crude oil rallied around 2% on Friday as analysts bet that a meeting set to take place Mid-march between Russia and OPEC members such as Saudi Arabia, Venezuela and Qatar would yield an agreement to cut production in order to drive prices higher. This benefitted the ‘Loonie’ because oil is Canada’s most lucrative export.
Australian Dollar
The Pound to Australian Dollar exchange rate rallied by around two cents on Friday as Sterling rebounded from a nine-month low on Thursday. After sending GBP/AUD down by over eight cents during the first four days of the week it seems the scalpers paused to lock in profit on the fifth day.
New Zealand Dollar
Sterling strengthened by around three cents against the New Zealand Dollar on Friday as traders locked in profit from the week’s sharp falls. The ‘Kiwi’ continued to slide when markets reopened this week thanks to a downbeat New Zealand business confidence print of 7.1, which marked a massive slowdown on the previous score of 23.0.
09:30 GBP Mortgage Approvals (JAN) Medium 74.0k
10:00 EUR Euro-Zone Consumer Price Index Estimate (YoY) (FEB) High 0.0%