Pound Static Ahead of Trade Data
A lack of UK news left the Pound trading fairly limply on Wednesday, with the main movements in GBP exchange rates being triggered by external developments.
While Sterling has already recorded modest gains against AUD and NZD this morning, GBP/EUR is holding at opening levels.
If today’s ECB interest rate decision disappoints, the Pound could bounce higher against the Euro later today.
However, with tomorrow’s UK trade data expected to show a widening of the trade deficit, any gains could prove short lived.
Euro Stabilises before ECB Announcement
A robust German retail PMI lent the Euro support ahead of today’s interest rate decision from the European Central Bank (ECB).
Calls for tighter ECB monetary policy from German Finance Minister Wolfgang Schäuble also helped keep the Euro stable ahead of today’s interest rate decision.
Hawkish comments from President Mario Draghi would send the Euro soaring, but a failure to commit to the tapering of quantitative easing would weigh heavily on the single currency.
GBP/USD Approaches Monthly High
With US data falling short of forecasts and weighing on Federal Reserve interest rate hike expectations, the GBP/USD exchange rate was able to approach its best levels for a month.
If today’s speeches from Fed officials up the odds of interest rates being left on hold for the rest of the year, the Pound could extend gains against the US Dollar.
Canadian Dollar Surges on BOC Announcement
The Bank of Canada’s (BOC) surprise decision to increase interest rates sent the Canadian Dollar soaring on Wednesday afternoon. The commodity-driven currency jumped against the Pound, causing the GBP/CAD exchange rate to lose almost 4 cents.
Today’s Canadian Ivey PMI could lend CAD further support if it shows the improvement expected.
Poor Aussie Data Boosts GBP/AUD
The Pound was able to gain on the Australian Dollar on Wednesday as a result of slightly disappointing Australian growth figures. GBP/AUD advanced further still as Australian retail sales and trade balance figures fell short.
AUD broadly softened after retail sales were shown to have stagnated unexpectedly on the month and the national trade surplus narrowed.
New Zealand Dollar Fluctuates on Election Polls
After the latest polls for the New Zealand election showed that the National Party and Labour Party are currently neck-and-neck, the New Zealand Dollar weakened on political uncertainty.
Improved demand for higher-risk currencies helped NZD exchange rates recover some of their losses later in the day however and this evening’s domestic manufacturing activity index could lend further support if it shows improvement.
Data Released Today
12:45 EUR European Central Bank Rate Decision (SEP 07)%
12:45 EUR ECB Marginal Lending Facility (SEP 07)
12:45 EUR ECB Deposit Facility Rate (SEP 07)
12:45 EUR ECB Asset Purchase Target (SEP)
13:30 EUR ECB President Draghi Holds Press Conference
13:30 CAD Building Permits (MoM) (JUL)
13:30 USD Initial Jobless Claims (SEP 02)