Pound Sterling to Euro, US Dollar Exchange Rates Retain Friday’s Gains before CPI Data
On Friday rumours that Spain and the Netherlands are in support of a soft Brexit drove Pound Sterling (GBP) exchange rates over 1% higher.
While GBP’s performance against the Euro was less impressive, the currency largely retained gains over the weekend.
The Rightmove house price report (which came in at 0.7% on the month and 1.1% on the year) had little impact on the Pound, but today’s domestic inflation data may prove more influential.
Economists have forecast that annual inflation edged from 3.1% in December, year-on-year, to 3.0%.
As easing consumer price pressures might keep the Bank of England (BoE) cautious on the subject of increasing borrowing costs, such a result could weaken the Pound.
Euro Broadly Stronger, GBP/EUR Exchange Rate Struggles
The Pound to Euro (GBP/EUR) exchange rate remained under pressure on Monday, with the common currency buoyed by US Dollar weakness, progress in German coalition talks and hopes that the European Central Bank’s (ECB) attitude to tightening monetary policy might be changing.
Today’s German inflation data had no impact on the Euro as the final readings were in line with initial forecasts of 0.6% month-on-month and 1.7% year-on-year.
Investors will now be looking to tomorrow’s Eurozone construction output figures and final inflation data for the Eurozone as a whole. Annual inflation for the bloc is expected to be negatively revised – a Euro negative result.
Pound to US Dollar (GBP/USD) Exchange Rate Holding Best Levels
The Pound Sterling to US Dollar (GBP/USD) exchange rate surged to its best levels since the EU referendum last week, and the pairing managed to consolidate gains on Monday.
While the Pound was fairly static ahead of the release of the UK’s latest inflation figures, the US Dollar was on a decided downtrend.
The US currency has been sliding against most the majors since the start of the New Year on the expectation that stagnant US inflation might alter the Fed’s rate hike plans. The belief that other major central banks will pursue tighter monetary policy in 2018 is also keeping the US Dollar under pressure.
According to economics reporter Eshe Nelson: ‘Even as US companies performed well last year—evidenced by the record-breaking stock market—and the economy grew at a healthy pace, the Dollar hasn’t been able to withstand competition from other currencies, where faster-than-expected economic growth and the withdrawal of central bank stimulus has attracted investors.’
Influential US data is absent until Wednesday, so the US Dollar may lack any motivation to recover.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Edges Higher Despite Canadian Home Sales Data
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate crept higher on Monday despite a solid uptick in Canadian existing home sales.
Sales rose 4.5% on the month in December, up from an increase of 3.9% in the previous period.
According to Canadian Real Estate Association (CREA) President Andrew Peck; ‘Monthly momentum for national home sales activity gained strength late last year and further expected economic and job growth will buoy sales activity this year despite slightly higher expected interest rate.’
The data failed to boost the Canadian Dollar ahead of this week’s Bank of Canada (BOC) rate decision, however. A report in the Economic Times also indicated that we could soon see a short-term correction in oil prices. If that proves to be the case, the declining value of Canada’s key commodity could drive CAD lower.
Pound to Australian Dollar (GBP/AUD) Exchange Rate Static after Confidence Increase
With Australia’s weekly consumer confidence index showing an uptick in sentiment, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was left trading in a narrow range.
The measure improved from 122.0 to 123.5. Separate Australian data revealed a surge in new motor vehicle sales. The next Australian data of note is today’s Westpac consumer confidence index. If this rises the Australian Dollar could climb.
Pound to New Zealand Dollar (GBP/NZD) Exchange Rate up Despite Solid NZ Spending Data
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate edged higher ahead of the release of the UK’s latest inflation figures. Sterling crept higher against the New Zealand Dollar even as NZ card spending data showed a solid increase in spending.
Total card spending increased by 0.2% month-on-month while retail card spending rose 0.5% on the month.
GBP/NZD could give up gains later today however if the latest Global Dairy Trade auction shows an increase in the price of New Zealand’s key commodity.