Pound Sterling (GBP) Rocked by Gloomy GDP Figures
The Pound (GBP) got off to a poor start this week, with the UK currency facing broad losses yesterday on the back of some gloomy GDP figures.
The ONS reported that the UK economy contracted 0.4% in April – the largest fall in growth in three years – stoking speculation of a contraction in growth in the second quarter.
This downtrend in Sterling looks set to continue today as the UK’s latest labour figures are forecast to show that domestic wage growth struck a 10-month low in April.
GBP/EUR Exchange Rate Losses Tempered by ECB Speculation
While the Pound Euro (GBP/EUR) exchange rate fell back on Monday, the pairing’s losses were trimmed somewhat by the news that the European Central Bank (ECB) may be flirting with the idea of a rate cut.
Reuters reports that members of the ECB’s rate setting team are considering cutting interest rates if growth continues to slow, with members also hoping that a cut could help lower Euro exchange rates.
In the absence of any notable Eurozone data today, expect to see EUR investors remain focused on the ECB, which will likely continue to limit the appeal of the Euro.
GBP/USD Exchange Rate Slumps as Mexico Tariffs Suspended
The Pound US Dollar (GBP/USD) exchange rate fell over half a cent yesterday, reversing the gains seen following Friday’s US payroll miss, as markets welcomed the news that the US will refrain from placing tariffs on Mexican exports.
The news came as a major relief to USD investors amidst fears the tariffs could have hurt US companies who move products back and forth over the border.
Looking ahead, a lull in US economic data will likely leave US trade policy in focus today, with Trump’s recent comments on China potentially bolstering hopes of a de-escalation of tension.
GBP/CAD Exchange Rate Slumps on Mexico Tariff Relief
The Pound Canadian Dollar (GBP/CAD) exchange rate struck a new 2019 low yesterday as the ‘Loonie’ surged after the cloud hanging over the USMCA trade deal was lifted by the news that Trump had suspended plans to place tariffs on Mexican products,
GBP/AUD Exchange Rate Gains as US Dollar Strengthens
Despite some volatility, the Pound to Australian Dollar (GBP/AUD) exchange rate closed Monday’s session around half a cent higher as demand for the ‘Aussie’ was weakened by a strong uptick in the US Dollar (USD).
GBP/NZD Exchange Rate Buoyed by Profit Taking and China Worries
The Pound to New Zealand Dollar (GBP/NZD) exchange rate stormed higher yesterday as the ‘Kiwi’ was undermined by a stronger US Dollar and a bout of profit taking, as well as some weak Chinese data, after last week saw NZD enjoy its strongest weekly gain since November.