Pound Sterling Exchange Rates Rebound after Unilever Shock
The Pound initially weakened on a lack of UK data and the fact that consumer goods giant Unilever had announced it would declare its offices in Rotterdam, the Netherlands, as its headquarters, rather than its premises in London.
However, when it became clear that the company was not actually moving out of London and would continue to operate there, the Pound later recovered versus some of its peers.
GBP/EUR Makes Sharp Recovery after Slump on Unilever Decision
The Euro was on poor form versus many of its peers yesterday, which allowed the Pound to fully recover the losses made initially on fears of the relocation of the UK’s third-biggest company.
With no economic data on the calendar, markets were awaiting US figures, which printed strongly and weakened the Euro by driving up US Dollar demand.
Unless finalised Eurozone consumer price index figures prove worse or better than expected today, markets may be more interested in the fourth-quarter labour costs figure.
If labour costs have grown, this would suggest higher wages, which in turn would improve the inflationary outlook.
US Dollar Pushes Pound Back Down to Daily Lows after Strong Data; GBP/USD Recovery Short-Lived
The US Dollar received a strong boost yesterday from positive economic data – which showed that jobless claims recently fell back towards a 48-year low – and market relief that Donald Trump’s pick for his new economic advisor wasn’t as fiercely protectionist as some of the other candidates.
Larry Kudlow had some strong words for China, but also claimed he was not in favour of blanket tariffs and that he didn’t believe ‘you should punish your friends to try and punish your enemies in international affairs’.
The University of Michigan sentiment index for March is set for release today.
Strong Gains for GBP/CAD as Risk-Appetite Declines
Rising confidence that the US will not fully embrace a protectionist agenda, uninspiring Canadian data and soft oil prices left little reason for markets to buy into the Canadian Dollar yesterday.
The GBP/CAD exchange rate was able to quickly rebound from its morning slump and strike a fresh post-referendum high.
Canadian manufacturing sales data is set for release today.
GBP/AUD Exchange Rate Quickly Recovers as US Outlook Cools Risk Appetite
The Australian Dollar was on weak form yesterday, despite rising consumer inflation expectations.
The latest measure of households’ outlook for long-term price growth rose from 3.6% to 3.7%, but strong data from the US and the belief that President Donald Trump’s pick for economic advisor held a glimmer of hope for the survival of free-trade saw AUD demand slump. This was because markets were less-inclined to believe more tariffs were on the way that would damage the US economy.
GBP/NZD Exchange Rate Climbs after New Zealand GDP Figures Disappoint Forecasts
The Pound made a strong recovery versus the New Zealand Dollar yesterday after New Zealand’s latest GDP figures disappointed.
A slowdown in dairy production due to hot weather kept quarter-on-quarter growth steady at 0.6% against forecasts of an uptick to 0.8%.
This meant year-on-year GDP only accelerated from 2.7% to 2.9%, disappointing forecasts for 3.1% growth.