Pound Sterling Exchange Rates Flat Despite Soft Consumer Confidence
Pound Sterling (GBP) exchange rates traded flatly yesterday, even as UK consumer confidence tumbled and deputy Prime Minister Damian Green was forced to resign.
The latest UK consumer confidence index came in at -13, down from -12 previously, while sentiment was also hurt by news that British car manufacturing was on course for its first annual fall in eight years. In the 11 months to December, UK car production shrunk -2% to 1.58 million vehicles. If the trend persists through December then it will represent the first time that factories have suffered an annual decline since the midst of the financial crisis in 2009, when production crashed -31% to just under 1 million cars.
Sterling also had to contend with news that British Prime Minister Theresa May had forced her deputy Damian Green to resign after it emerged he had made misleading comments about pornography in his office during an internal investigation. The resignation of another key cabinet member was seen to put more pressure on the PM ahead of the next round of Brexit talks.
Pound to Euro (GBP/EUR) Exchange Rate Close to 21-Day Low
The Pound to Euro (GBP/EUR) exchange rate remains close to 21-day lows, however, the single currency was unable to register additional gains during yesterday’s session.
It seems the negative impact of falling consumer confidence and fresh political controversy were met with the mildly positive news that UK public sector borrowing came in lower-than-anticipated for November.
Compared to calls for £9.0 billion, it emerged yesterday that the government borrowed £8.7 billion to balance the books last month. The result suggests that UK Chancellor Philip Hammond could well meet his target of borrowing £49.9 billion this fiscal year.
Pound to US Dollar (GBP/USD) Exchange Rate Volatility Possible on Last Day of Trading Before Christmas
The Pound to US Dollar (GBP/USD) exchange rate held relatively firm through yesterday’s session. Data from the US showed that the world’s largest economy expanded at an annualised rate of 3.2% in the third quarter, which was slightly lower than previous estimates of 3.3%.
A Q3 core PCE inflation indicator also disappointed, printing at 1.3% compared to the median consensus of 1.4%. However, considering that annual UK third quarter growth is tipped to come in much lower at 1.5% today, Sterling was unable to pounce on the day’s soft US data.
Being the last trading day before Christmas, today’s session could feature enhanced volatility as thin trading volumes exacerbate moves.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Plummets on Sturdy Canadian Inflation & Retail Reports
The Pound to Canadian Dollar (GBP/CAD) exchange rate tumbled -150 pips to strike a fortnightly low yesterday as Canadian data exceeded market expectations.
The ‘Loonie’ was boosted by a huge jump in domestic retail sales, from 0.2% to 2.5%, which massively overshot expectations of 0.3%. And sentiment towards the North American currency was given an even bigger boost by a surge in inflation.
The rise from 1.4% to 2.1% in consumer price was seen to boost the possibility of tighter policy from the Bank of Canada. GBP/CAD could suffer more losses if this afternoon’s Canadian GDP report sees growth upgraded from 3.3% to 3.5%, as predicted.
Pound to Australian Dollar (GBP/AUD) Exchange Rate Slides to 1-Month Low
Sterling skidded to a one-month low versus the Australian Dollar yesterday, depreciating by around -80 pips.
After a strong run that saw GBP/AUD strike its highest level since Brexit, the Pound has now weakened in eight of the last 10 days of trading. If sentiment continues to favour the ‘Aussie’ we could see Sterling suffer further losses over the festive period.
Pound to New Zealand Dollar (GBP/NZD) Exchange Sinks on Sturdy New Zealand GDP
Following robust New Zealand GDP data earlier in the week, the Pound remained on the back foot versus the ‘Kiwi’ Dollar yesterday. GBP/NZD drifted lower by around a third of a cent.