Pound Sterling Exchange Rate Flat During Holiday Trade
The Pound traded in a tight range versus most of the majors over the holiday period as most global investors focussed on cheese, crackers, mulled wine and roast potatoes, rather than the myriad possible outcomes of Brexit.
There are few UK data prints due for release this week, so demand for the Pound is unlikely to shift significantly over the next few days. Any unexpected Brexit headlines could prove impactful, with positive developments likely to boost Sterling’s appeal and negative news liable to weigh on the Pound.
Pound to Euro Exchange Rate Touches Monthly Low on Christmas Day
The Pound to Euro exchange rate touched its lowest level for around a month on Christmas Day, meaning Sterling has failed to register any lasting gains since a strong surge at the start of September.
The only key ecostat related to the single currency due for release this week is the December German consumer price index print on Friday, which is forecast to slow from 1.8% to 1.5%. The Euro’s appeal remains blighted by muted expectations for tighter policy from the European Central Bank (ECB).
The ECB doesn’t expect Eurozone CPI to hit the 2.0% target until past 2020 and a reduction in the currency bloc’s largest economy’s CPI rate is unlikely to alter those expectations.
Pound to US Dollar Exchange Rate Flat as President Trump Signs Off US Tax Bill
The Pound to US Dollar exchange rate drifted through the holiday period without any notable appreciations or depreciations.
The ‘Greenback’, which has grown by around two cents in December, was unable to strengthen on the official news that US President Donald Trump had signed off his ambitious tax bill.
While the reduction in corporation tax from 35% to 21% is widely expected to boost US inflation and economic growth, markets had already priced the tax cut into valuations of the US Dollar.
The potential for ‘Cable’ to trade lower during the first few months of 2018 remains, however, especially if incoming Federal Reserve President Jerome Powell employs hawkish rhetoric in upcoming policy statements.
During today’s session the only key announcement to look out for is the US consumer confidence index, which is anticipated to soften slightly from 129.5 to 128.0. Anything lower could prove mildly bearish for the US Dollar.
Pound to Canadian Dollar Exchange Rate Sinks to 20-Day Low as Oil Prices Surge to 2.5-Year Highs
Sterling sunk to a 20-day low over the Christmas break, sliding by around -40 pips as rising oil prices bolstered the appeal of the commodity-correlated Canadian Dollar.
Crude prices soared to two-and-a-half-year highs following news of a pipeline explosion in Libya that threatens to sideline -90,000 barrels a day of global supply.
Pound to Australian Dollar Exchange Rate Remains at 5-Week Low
The Pound to Australian Dollar exchange rate remains close to five-week lows and Sterling looks unlikely to mount a significant rebound in the near-term.
A thin docket of economic data means GBP/AUD could trade with a neutral bias over the next few days.
Pound to New Zealand Dollar Exchange Rate Steady
The Pound to New Zealand Dollar exchange rate fluctuated with little directional bias over the holiday period and a lack of incoming data suggests the currency pair could continue to plateau over the next few days.