Pound Exchange Rates on Mixed Form; GBP Holds Position despite Inflation Disappointment
The Pound was on mixed form yesterday, succumbing to some of the stronger currencies but holding its ground against other peers.
Sterling was doing surprisingly well, given that the morning’s February inflation data showed that both overall and core consumer price growth had slowed by 0.1% more than expected.
This may lower the odds of an interest rate hike from the Bank of England (BoE) in May.
Today’s slew of UK data includes wage growth and government borrowing figures, so the Pound could see significant volatility.
GBP/EUR Exchange Rate Climbs as Eurozone ZEW Sentiment Surveys Show Weakening Confidence
Some poor Eurozone data and market focus on the upcoming US monetary policy announcements allowed the GBP/EUR exchange rate to register strong gains yesterday.
The latest German ZEW current situation index fell to a higher-than-expected 90.7 points, but the expectations index dropped below-forecast from 17.8 to 5.1, instead of hitting the consensus score of 13, while the Eurozone economic sentiment index weakened from 29.3 to 13.4.
GBP/USD Slips below Opening Levels as Markets Anticipate US Rate Hike Today
The US Dollar was largely able to rack up solid gains yesterday, meaning the GBP/USD exchange rate was stuck just under opening levels as the London session drew to a close.
There was no economic data on the calendar, but market focus on the likelihood of an interest rate hike from the Federal Open Market Committee (FOMC) as a result of the policy meeting concluding today boosted demand for USD.
GBP/CAD Exchange Rate Slips after Oil Supply Forecast Sends Crude Prices Racing Higher
Oil prices raced higher yesterday, supporting the Canadian Dollar and keeping the GBP/CAD exchange rate in negative territory.
Crude prices were driven up by new forecasts that suggested the Organisation of the Petroleum Exporting Countries (OPEC) would succeed in curbing the global oversupply of oil by September; sooner than had previously been expected.
Brent Crude prices rose 2.2%, while WTI Crude climbed 2.5%. A better-than-expected 0.1% growth in Canadian wholesale trade sales during January also helped the Canadian Dollar higher.
GBP/AUD Records Small Gains as RBA Meeting Minutes Leave Markets with Little Hope of Near-Term Tightening
The GBP/AUD exchange rate was able to make minor gains yesterday thanks to soft trading from the Australian Dollar virtually across the board.
The meeting minutes of the latest Reserve Bank of Australia (RBA) monetary policy gathering gave markets little new information to digest, with the board still confident in the economy but uncertain over wage growth.
Focus on Upcoming Monetary Policy Meetings Boosts GBP/NZD Exchange Rate
The New Zealand Dollar was left weak yesterday after a disappointing result from the latest Global Dairy Trade auction.
Also weighing on NZD was the approach of today’s monetary policy announcements from both the US Federal Reserve and the Reserve Bank of New Zealand (RBNZ).
The Pound was therefore able to make gains of half a percent.