Pound Sterling (GBP) Struggles as Inflation Falls Short
The Pound (GBP) was left subdued on Wednesday as UK inflation was shown to have come up short in March, holding at 1.9% against forecasts it would tick up to 2%.
This left inflation outside the Bank of England’s (BoE) target range of 2-3%, likely increasing the chances that it will leave interest rates on hold this year as it wrestles with the uncertainty of Brexit.
Likely heaping further pressure on Sterling today will be the publication of the UK’s retail sales figures, as economists forecast that heightened Brexit uncertainty will have resulted in sales growth contracting in March.
GBP/EUR Exchange Rate Flat as Germany Slashes Growth Expectations
The Pound Euro (GBP/EUR) exchange rate initially stumbled yesterday, before paring some of its losses after Germany acknowledged that growth in 2019 may be weaker than previously predicted.
This resulted in Berlin slashing it growth forecasts in half, with officials now expecting Germany’s economy to expand by only 0.5% this year.
Meanwhile, the highlight of today’s session will likely be the Eurozone’s latest PMI, with the Euro potentially weakening if the slowdown in the bloc’s private sector is shown to have persisted into the second quarter.
GBP/USD Exchange Rate Flat as Safe-Haven Demand Stalls
The Pound US Dollar (GBP/USD) exchange rate was left rangebound on Wednesday, as demand for the safe-haven ‘Greenback’ dried up amidst a risk-on mood in markets.
This came in the wake of some upbeat data from China, which offset some stronger-than-expected domestic trade figures as the US trade deficit fell to an eight-month low.
Looking ahead, the US will publish its own retail sales figures for March later this afternoon, with the US Dollar likely to gain if sales growth rebounded in line with expectations.
GBP/CAD Exchange Rate Sinks as Canadian Inflation Jumps
The Pound Canadian Dollar (GBP/CAD) exchange rate fell around a cent yesterday as the ‘Loonie’ was strengthen by an impressive domestic inflation report as well as a jump in oil prices, with Brent crude reaching a new 2019 high of $72 a barrel.
The Canadian Dollar may build on this momentum later this afternoon, with domestic retail sales expected to have rebounded in February.
GBP/AUD Exchange Rate Flat as Australian Unemployment Rises
The Pound Australian Dollar (GBP/AUD) exchange rate was rangebound overnight on Wednesday as the ‘Aussie’ failed to find support after a rise in domestic unemployment offset a solid uptick in employment growth last month.
GBP/NZD Exchange Rate Gains on RBNZ Rate Cut Speculation
The Pound New Zealand Dollar (GBP/NZD) exchange rate struck higher on Wednesday, with the ‘Kiwi’ coming under pressure after a weaker-than-expected inflation print in the first quarter increased concerns that the Reserve Bank of New Zealand (RBNZ) will cut interest rates this year.