Pound (GBP) Flat Amid Election Speculation
The Pound (GBP) traded sideways at the end of last week’s session as markets remained wary of the currency amid ongoing political uncertainty.
Current projections indicate next month’s election is likely to result in a hung parliament, the prospect of which kept a firm cap on Sterling.
Looking ahead, UK politics will remain a key catalyst of movement in the Pound this week, with the publication of Labour’s manifesto potentially infusing the currency with volatility if it helps boost the party’s polling numbers.
GBP/EUR Exchange Rate Muted, Eurozone Inflation Near Three-Year Low
The Pound Euro (GBP/EUR) exchange rate was left rangebound on Friday following the publication of the Eurozone’s consumer price index.
This confirmed that inflation in the bloc fell to just 0.7% in October, its lowest levels since November 2016.
In focus for EUR investors this week will be the publication of the Eurozone’s latest PMI figures, with the Euro poised to drop if growth in the bloc’s private sector continued to stall in November.
GBP/USD Exchange Rate Firms as Markets Remain Risk-On
The Pound to US Dollar (GBP/USD) exchange rate climbed to a one-week high on Friday in response to a broad sell-off of the ‘Greenback’.
While data showed that a rebound in US retail sales was stronger than expected in October, this failed to counteract a prevailing risk-on mood which undermined demand for the safe-haven currency.
This came on the back of renewed US-China trade optimism, in the wake of upbeat comments from White House chief economic adviser Larry Kudlow on Thursday.
Trade headlines are likely to continue dictating the direction of USD exchange rates this week, with the US Dollar potentially softening further if the news remains broadly positive.
GBP/CAD Exchange Rate Steady as Oil Prices Stall
The Pound to Canadian Dollar (GBP/CAD) exchange rate stabilised at the end of last week’s session, with the oil-sensitive ‘Loonie’ left flat as Brent crude stalled below $63 a barrel.
GBP/AUD Exchange Rate Advances before RBA Minutes
The Pound to Australian Dollar (GBP/AUD) exchange rate strengthened by over 0.4% overnight as markets await the publication of minutes from the Reserve Bank of Australia’s (RBA) latest policy meeting. The minutes could weaken the ‘Aussie’ if they reinforce expectations of a rate cut from the bank in December.
GBP/NZD Exchange Rate Recovers Losses
The Pound to New Zealand Dollar (GBP/NZD) exchange rate weakened last week as New Zealand’s manufacturing PMI surprised to the upside, but the pairing has since clawed back some of its losses. New Zealand’s next notable data release is the domestic producer price index for the third quarter. Rising inflationary pressures would support the case in favour of the RBNZ leaving interest rates on hold.