GBP/USD Exchange Rate Surges on Dovish Fed Signals
The Pound US Dollar (GBP/USD) exchange rate leapt by around a cent during yesterday’s session as the Federal Reserve concluded its June policy meeting.
Whilst it is keeping policy unchanged this month, the ‘Greenback’ came under pressure as the Fed signalled that it was prepared to cut interest rates in the face of growing global and domestic risks.
Looking ahead, the US Dollar may come under pressure later this afternoon if the Philadelphia Manufacturing Index echoes the sharp drop in factory activity reported in the Empire State index earlier this week.
Pound Sterling (GBP) Buoyed by Second Referendum Speculation
The Pound (GBP) was initially rangebound yesterday as the UK’s latest CPI figures revealed domestic inflation slipped from 2.1% to 2% last month.
However Sterling sentiment began to pick up ground as the session went on as GBP investors welcomed reports that Labour leader Jeremy Corbyn was preparing to back a second Brexit referendum.
Centre stage today will be the Bank of England’s (BoE) June policy meeting as GBP investors wait to see if Mark Carney still believes that markets are ’underestimating’ the pace at which the bank will raise rates, whether the BoE Governor will be more cautious given recent events.
GBP/EUR Exchange Rate Gains as Italy Back in Focus
The Pound Euro (GBP/EUR) exchange rate continued to trend higher on Wednesday when the appeal of the single currency was dented by Italy’s row with Brussels over EU fiscal rules.
Making it clear that it refuses to back down over its budget plans, Rome called for the EU to relax its deficit rules after a law calling for existing rules to be changed was backed by Italian MPs.
In the absence of any notable economic data today, we may see the Euro continue to struggle to find momentum, with EUR investors likely to remain wary given the European Central Bank’s (ECB) recent comments on introducing new stimulus measures.
GBP/CAD Exchange Rate Muted as Canadian Inflation Soars
The Pound Canadian Dollar (GBP/CAD) exchange rate struggled to hold ground on Wednesday, with the ‘Loonie’ able to counter Sterling’s strength as Canada published its own CPI figures, revealing that domestic inflation jumped to a seven-month high in May.
GBP/AUD Exchange Rate Extends Gains on Lowe Comments
The Pound to Australian Dollar (GBP/AUD) exchange rate struck a four-week high overnight on Wednesday, with the pairing extending its gains from the European trading session after Reserve Bank of Australia (RBA) Governor Philip Lowe suggested it was ‘not unrealistic’ to expect further rate cuts.
GBP/NZD Exchange Rate Gains Trimmed by Robust NZ GDP
The Pound to New Zealand Dollar (GBP/NZD) exchange rate fell back from its best levels overnight on Wednesday as the ‘Kiwi’ was bolstered by a robust first quarter NZ GDP report.