Pound Sterling (GBP) Flat as no Breakthrough Made in Brexit talks
The Pound (GBP) traded in a narrow range against the majority of its peers yesterday after the latest round of Brexit negotiations ended without a breakthrough.
Following talks in Brussels, EU Brexit negotiator Michel Barnier said that negotiations remained ‘difficult’ and that ‘no solution has been identified’ to the Irish backstop.
Brexit is likely to remain the main catalyst of movement in Sterling today, unless the Bank of England’s Silvana Tenreyro has any policy bombshells to drop in a speech later this morning.
GBP/EUR Exchange Rate Stable as all Eyes on ECB
The Pound Euro (GBP/EUR) exchange rate held steady throughout most of Wednesday’s session, with investors steering clear of the single currency as they await the European Central Bank’s rate decision later today.
While no policy changes are expected from the bank this month, analysts expect it to downgrade its economic forecasts for 2019 in light of the Eurozone’s recent slowdown.
On top of this, some analysts predict that the bank may also drop some hints that it will side line plans to tighten monetary policy this year, likely applying further pressure to the Euro.
GBP/USD Exchange Rate Steady as US Trade Deficit Surges
The Pound US Dollar (GBP/USD) exchange rate remained rangebound yesterday after the latest US trade figures revealed that the domestic trade deficit ballooned to a decade-high in December.
Not only is this a blow to Donald Trump’s trade policies, but analysts also suggest this indicates that net trade softened domestic GDP growth in the fourth quarter of 2018.
In the absence of any notable US economic data, any movement in the US Dollar is likely to be come as a result of a shift in the Euro, with USD likely to gain if EUR tumbles.
GBP/CAD Exchange Rate Surges as BoC Suggests Uncertainty of Future Hikes is Growing
The Pound Canadian Dollar (GBP/CAD) exchange rate shot up by over a cent on Wednesday, with the pairing striking a new 10-month high following the Bank of Canada’s (BoC) latest policy meeting.
While the bank’s decision to leave interest rates on hold this month came as no surprise to investors, it struck a more dovish line in its forward guidance, battering the ‘Loonie’ as it suggested the timing of future rate hikes had grown increasingly uncertain.
GBP/AUD Exchange Rate Slips on Impressive Australian Trade Figures
After roaring higher on Wednesday following some disappointing Australian GDP figures, the Pound Australian Dollar (GBP/AUD) exchange rate began to relinquish some ground overnight, as the ‘Aussie’ was boosted by a bumper trade surplus in January.
GBP/NZD Exchange Rate Slides as Risk-Appetite Accelerates
The Pound New Zealand Dollar (GBP/NZD) exchange rate also dipped overnight on Wednesday, with the ‘Kiwi’ strengthening in step with its antipodean cousin as Australia’s stronger-than-expected trade figures helped to boost market risk-sentiment.