Pound Sterling (GBP) Exchange Rates Static as Underwhelming House Price Index Limits Pound Appeal
Pound Sterling (GBP) exchange rates were pretty rangebound on Monday, with pairings like GBP/EUR and GBP/USD fluctuating around the day’s opening levels.
While Brexit news is still hogging the headlines, none of the latest developments had much impact on Sterling.
UK data did little to support the Pound however as December’s Rightmove house price index saw another contraction on the month, with prices falling -1.5%.
This weaker showing points towards a persistent softness in the UK housing market.
As markets brace for tomorrow’s UK consumer price index data and with Theresa May struggling to shore up support for her Brexit proposal the upside potential of the Pound is unlikely to improve.
GBP/EUR Exchange Rate Steady despite Downward Revision to Eurozone Inflation
Demand for the Euro (EUR) dimmed on Monday after the finalised Eurozone Consumer Price Index data for November saw a surprise downward revision.
This left the headline inflation rate at just 1.9%, thus falling below the European Central Bank’s (ECB) 2% target and further diminishing the prospect of a 2019 interest rate hike.
While there were signs of progress surrounding the controversial Italian budget, it wasn’t enough to shore up EUR exchange rates.
Another underwhelming performance from the German IFO business sentiment survey could put further pressure on the single currency today.
GBP/USD Exchange Rate Rallies on Signs of Softening US Manufacturing Sector
A weaker-than-expected Empire State Manufacturing Index and NAHB housing market index left US Dollar (USD) exchange rates on the back foot yesterday.
Investors were discouraged to find that the manufacturing index had slumped from 23.3 to 10.9 in December, signalling further weakness in the sector.
With the US economy losing momentum, the Federal Reserve may think twice about continuing its rate hike cycle in 2019.
As forecasts point towards a significant slowdown in November’s housing starts, USD exchange rates could lose further ground this afternoon.
GBP/CAD Exchange Rates Climb as Canadian Housing Data Disappoints
Another sharp contraction in Canadian existing home sales left Canadian Dollar (CAD) exchange rates lacking support yesterday.
As sales fell -2.3% on the month, confidence in the health of the wider Canadian economy continued to diminish, dragging the Canadian Dollar lower.
With WTI crude rangebound around US$49 a barrel investors saw no reason to favour the risk-sensitive ‘Loonie’.
However, an uptick in October’s manufacturing sales could offer CAD exchange rates a small boost in the near-term.
GBP/AUD Exchange Rate Strengthens as Risk Appetite Slides
The mood towards the Australian Dollar (AUD) soured yesterday as market risk appetite remained limited at the start of the week.
This continued overnight as the minutes from the Reserve Bank of Australia’s (RBA) ultimately failed to compel the ‘Aussie’ higher.
GBP/NZD Slides as NZ Business Confidence Climbs
The Pound New Zealand Dollar (GBP/NZD) exchange rate weakened overnight on Monday as the ‘Kiwi’ was lifted by a jump in domestic business confidence in December.
If the upcoming dairy auction shows a decline in the price of New Zealand’s key commodity, however, the New Zealand Dollar may dip.