Pound Sterling (GBP) Exchange Rates Stall Following Bleak Economic Forecasts
The Pound (GBP) was left treading water on Thursday as markets reacted to a gloomy UK economic forecast from the European Commission (EC).
The EC’s forecasts see the UK lagging at the bottom of its EU growth table next year, with predictions that the growth will slow to just 1.2% even if a Brexit deal is successfully agreed.
However the Pound is poised to roar back to life later this morning with the UK expected to report GDP jumped from 0.4% to 0.6% in the third quarter.
GBP/EUR Exchange Rate Muted as EC Forecasts Reignite Italy Budget Row
The Pound Euro (GBP/EUR) exchange rate traded in a narrow range yesterday as the EC economic forecasts also escalated the ongoing row between Brussels and Rome over Italy’s draft budget for 2019.
The commission expects Italy’s economy will grow just 1.2% next year, falling below Rome’s expectation of 1.5% and resulting in Italy running a deficit of 2.9% rather than the 2.4% outlined in its budget.
In the absence of any notable Eurozone data today, this row may remain a major concern for EUR investors through to the end of the session, potentially weakening the single currency.
GBP/USD Exchange Rate Clipped by Fed Rate Decision
The Pound US Dollar (GBP/USD) exchange rate slumped by around half a cent during yesterday’s trading session as markets reacted to the Federal Reserve’s latest rate decision.
While no policy changes were made by the bank this week, the ‘Greenback’ was still buoyed by the Fed’s upbeat economic outlook as the bank signalled it was still on track for a December rate hike.
Looking ahead, the US Dollar may struggle to carry this momentum through Friday’s session, with the political fallout from the US mid-terms potentially clipping demand for the US currency.
GBP/CAD Exchange Rate Subdued on BoC Optimism
The Pound Canadian Dollar (GBP/CAD) exchange rate edged lower on Thursday as CAD exchange rates were buoyed by expectations of a rate hike from the Bank of Canada (BoC) in December, although the oil sensitive ‘Loonie’ ultimately found its gains trimmed by a dip in crude prices.
GBP/AUD Exchange Rate Fluctuates on Optimistic RBA Quarterly Statement
After slumping during the European session on Thursday, the Pound Australian Dollar (GBP/AUD) exchange rate was hit by further volatility overnight with the ‘Aussie’ sliding in the wake of the Fed rate decision before rallying once again following an upbeat Statement on Monetary Policy from the Reserve Bank of Australia (RBA).
GBP/NZD Exchange Rate Flat Following Fed Meeting
The Pound New Zealand Dollar (GBP/NZD) exchange rate meanwhile was left to tread water overnight on Thursday as a stronger US Dollar weakened demand for the ‘Kiwi’.