Pound Sterling (GBP) Exchange Rates Slump as UK Inflation Slides
The Pound (GBP) fell against the majority of its peers yesterday, with the currency coming under considerable pressure following the release of the UK’s latest consumer price index.
This figures revealed inflation slowed from 2.7% to 2.4% in September, falling past forecasts of a modest drop to 2.6%.
Sterling dropped as the figures relieve some of the pressure on the Bank of England to continue raising interest rates.
Looking ahead GBP investors are bracing for further losses today, with an expected contraction in UK retail sales and the ongoing EU summit both potentially pressuring market sentiment.
GBP/EUR Exchange Rate Losses Trimmed by Italy Drama
While the Pound Euro (GBP/EUR) exchange rate weakened on Wednesday on the back of the UK’s disappointing inflation figures, the blow was softened by the latest events in Italy’s budget saga.
The latest development revolved around suggestions by an Italian official that the EU may still reject Rome’s latest budget revisions, with the same official also warning that the country faces a possible downgrade to its sovereign credit rating.
Meanwhile in the absence of any notable Eurozone data, Italy may remain in focus throughout today’s session, potentially adding further pressure on the single currency.
GBP/USD Exchange Rate Slumps following Hawkish FOMC Minutes
The Pound US Dollar (GBP/USD) exchange rate tumbled by around 0.5% on Wednesday as Brexit and the Italian budget concerns helped to fuel demand for the safe-haven ‘Greenback’.
The US Dollar was then turbo charged later in the evening as the minutes from the Federal Reserve’s September meeting, revealed that policymakers unanimously backed last month’s rate hike, while also showing support for further hikes down the line.
However the ‘Greenback’ may struggle to replicate its success on Thursday, with an expected dip in the Philadelphia Fed manufacturing index potentially weakening sentiment this afternoon.
GBP/CAD Exchange Rate Flat as Canadian Factory Data Disappoints
The Pound Canadian Dollar (GBP/CAD) exchange rate was also prevented from registering any notable losses yesterday as a contraction in Canadian factory sales as well as a slump in oil prices both weighed on the ‘Loonie’ throughout the trading session.
GBP/AUD Exchange Rate Slides as Australian Unemployment Strikes Six Year Low
The Pound Australian Dollar (GBP/AUD) exchange rate struck a two-week low overnight on Wednesday following a surprise drop in Australian unemployment.
Data published by the Australian Bureau of Statistics (ABS) showed unemployment suddenly fell to 5% in September from 5.3% the month before, bolstering hopes that the Reserve Bank of Australia (RBA) may be confident enough to raise rates in 2019.
GBP/NZD Exchange Rate Holds Steady as Fed Rate Expectations Weaken Risk Appetite
The Pound New Zealand Dollar (GBP/NZD) exchange rate remained rangebound on Wednesday, with the ‘Kiwi’ forced to relinquish its initial gains as the hawkish Fed minutes led investors to shun riskier currencies.
09:30 GBP Retail Sales (Sep)
13:30 USD Philadelphia Fed Manufacturing (Sep)
13:30 CAD ADP Employment Change (Sep)