Pound Sterling (GBP) Stable on Trump Trade Optimism
The Pound (GBP) was mostly rangebound yesterday following the publication of the UK’s latest construction PMI after the sector registered its third contraction so far this year.
However some upside in Sterling was found later in the day following a press conference between Theresa May and Donald Trump in which the US President was enthusiastic about the chances of a US-UK trade deal post-Brexit.
Today will bring the release of the UK’s latest PMI reading for May, with the Pound likely to face headwinds if the services sector is shown to have also contracted last month.
GBP/EUR Exchange Rate Firms as Eurozone Inflation Nosedives
The Pound Euro (GBP/EUR) exchange rate edged higher on Tuesday following the publication of an abysmal Eurozone CPI reading.
Inflation in the bloc was shown to have plummeted from 1.7% to 1.2% in May, with investors shying away from the single currency for fear that stubbornly low inflation could further delay the European Central Bank’s (ECB) next rate hike.
The Euro is likely to remain on the back foot this morning as well, as data is expected to show that Eurozone retail sales contracted in April.
GBP/USD Exchange Rate Buoyed as Powell Drops ‘Patient’ Stance
The Pound US Dollar (GBP/USD) exchange rate also drifted upwards yesterday, with the ‘Greenback’ losing ground in the afternoon following a speech by Federal Reserve Chair Jerome Powell.
USD investors were quick to seize on Powell’s decision to drop any mention of ‘patience’ in regards to monetary policy, something which fueled speculation the bank could cut interest rates later this year.
Coming up this afternoon will be the release of the ISM non-manufacturing PMI, which could keep the pressure on the US Dollar if growth in the US service sector slowed last month, as some analysts suspect.
GBP/CAD Exchange Rate Flat as Trump Presses Ahead with Mexico Tariffs
The Pound Canadian Dollar (GBP/CAD) exchange rate remained in a narrow range throughout Tuesday’s session as Donald Trump warned he would push on with the 5% tariffs on Mexico next week, with CAD investors concerned about the potential impact on the USMCA trade agreement.
GBP/AUD Exchange Rate Steady Following Australian GDP
The Pound Australian Dollar (GBP/AUD) exchange rate remained in a fairly narrow range overnight on Tuesday as Australia’s economy was shown to have accelerated in the first quarter of 2019, climbing from 0.2% to 0.4%, but saw annualised growth fall to a decade-low of 1.8%.
GBP/NZD Exchange Rate Slides as Risk Sentiment Improves
The Pound to New Zealand Dollar (GBP/NZD) exchange rate struck a fresh two-month low overnight on Tuesday, with a jump in market risk appetite helping to boost the ‘Kiwi’ amidst growing speculation the Fed could cut rates this year.