Goldman Sachs CEO Admits Softer-than-Expected Brexit Impact; Pound Sterling Exchange Rates Climb
Pound Sterling (GBP) was able to end the day on strong form versus its major currency peers.
Several positive developments late in the afternoon caused GBP to race higher, with Germany apparently agreeing with Northern Ireland that a Brexit treaty should have a backstop to protect the open border between it and the Republic of Ireland, news that Theresa May will host trade talks with Australian Prime Minister Malcolm Turnbull next week and Goldman Sachs Chief Executive Lloyd Blankfein admitting that the impact from the vote for Brexit had been less dramatic than he had anticipated.
GBP/EUR Exchange Rate Climbs Sharply as ECB Meeting Minutes Confirm Open-Endedness of QE
The GBP/EUR exchange rate was able to gain in the region of 0.7% yesterday, with a disappointing set of European Central Bank (ECB) monetary policy meeting minutes from March prompting investors to sell the Euro.
Markets had become excited immediately following last month’s meeting, as the monetary policy statement released did not contain the usual references to the potential for quantitative easing to be extended or expanded.
However, the minutes made it clear that policymakers still believed asset purchasing needed to continue, and would remain open-ended; not what the markets were hoping to hear.
Finalised German consumer price index figures for March and the February Eurozone trade balance could cause some flutters for the Euro today.
GBP/USD Exchange Rate Makes Gains despite Safe-Haven Demand on Syria Conflict Fears
Pound Sterling was able to climb against the US Dollar yesterday, despite the fact that the ‘Greenback’ had seen strong demand. Markets were fretting over geopolitics and rushing into safe haven assets; President Donald Trump was clashing with Russian officials after threatening to launch missile strikes against Syrian targets following a suspected chemical weapons attack by Syria’s President Assad.
However, Russia has vowed to shoot any missiles out of the sky and retaliate against the US. Trump recently tweeted that US-Russia relations are at their lowest point, even including during the Cold War.
The University of Michigan preliminary April sentiment index is set for release today and could weigh on the US Dollar, given the forecasts are for weakening from 101.4 to 100.5.
Weak Domestic Data, Falling Crude Oil Prices and Strong US Dollar Boosts GBP/CAD Exchange Rate
There was little reason to buy the Canadian Dollar yesterday, which allowed the GBP/CAD exchange rate to make gains of over half a percent.
The US Dollar was strong, and this forced crude oil prices down by around 1%, even though fears over conflict in the Middle East had earlier boosted prices over fears of the potential to disrupt supply. Those tensions were keeping markets away from the risky Canadian Dollar, however.
Housing price data for February gave further reasons to stay away from the ‘Loonie’, after showing a surprise -0.2% decline month-on-month and slower-than-expected annualised growth of 2.6%.
Existing home sales figures for March are the only Canadian data set for release today.
Australian Dollar Holds Strength Elsewhere despite Risk Appetite, but GBP/AUD Advances
Although geopolitical tensions may have been weighing on the markets yesterday, the Australian Dollar was able to remain on solid form versus some of its peers. This wasn’t the case against the Pound, however, with the GBP/AUD exchange rate recording notable gains.
Regardless, the Australian Dollar seemed to be doing a good job of shrugging off the early morning’s disappointing data, which showed a small weakening in consumer inflation expectations and a sharp drop in the pace of investment lending.
The Australian Dollar could spend much of the day reacting to the findings of the latest Reserve Bank of Australia (RBA) Financial Stability Review.
GBP/NZD Exchange Rate Strengthens Despite New Zealand Dollar Firmness Elsewhere
Like the Australian Dollar, the New Zealand Dollar was able to hold onto some strength yesterday, although the GBP/AUD exchange rate was still able to press higher.
There is no domestic data set for release from New Zealand today, but NZD could nonetheless have a volatile day, due to this morning’s release of Chinese exports, imports and trade balance figures.