Pound (GBP) Exchange Rates Boosted by Election Polls
The Pound remained on a generally strong footing yesterday as polls continued to point to a Conservative majority.
However, as a large proportion of voters remain undecided the potential for an election upset remains, limiting the headroom for further Pound gains.
Today’s monthly gross domestic product reading could shore up GBP exchange rates if it points towards an uptick in growth momentum.
Euro (EUR) Supported by German Trade Data
Confidence in the health of the German economy improved on the back of October’s trade data thanks to a surprise widening of the trade surplus.
Exports defied forecasts of a -0.7% contraction to instead deliver growth of 1.2% on the month, suggesting a more limited drag from global trade tensions than expected. However, the Euro struggled to capitalise on this positive data as order books still point towards weakness in the German trade outlook.
A positive reading from December’s ZEW economic sentiment index may encourage the single currency to push higher today.
US Dollar (USD) Static Before Business Confidence Data
Market risk appetite proved limited in the wake of underwhelming Chinese trade data, but this failed to give the US Dollar any particular boost.
As the odds of an imminent breakthrough in US-China trade relations remain muted, USD exchange rates struggled to find much traction and a minor uptick in consumer inflation expectations had little impact.
A stronger month for the NFIB small business optimism index may give USD some grounds to advance later today.
Canadian Dollar (CAD) Shakes off Building Permits Decline
Another monthly drop in building permits was not enough to leave the Canadian Dollar under pressure yesterday, even as the construction sector continued to show signs of weakness.
As the impact of Friday’s disappointing jobs data faded, CAD exchange rates recovered some of their recent losses over the course of the day.
However, as long as signs continue to point towards weakness within the domestic economy support for the Canadian Dollar could remain limited.
Disappointing Chinese Trade Data Weighs on Australian Dollar
The Australian Dollar fell further out of favour with investors in the wake of underwhelming Chinese trade data.
Although import volumes saw a modest increase on the year this was not enough to outweigh a fresh export contraction, signalling that the world’s second largest economy is still losing momentum. With weaker Chinese trade demands likely to weigh on the Australian economy in the months ahead AUD exchange rates were left to trend lower once again.
Comments from Reserve Bank of Australia (RBA) Governor Philip Lowe had little impact on the ‘Aussie’ overnight.
Mixed Manufacturing Activity Limits New Zealand Dollar (NZD) Potential
A mixed set of manufacturing activity figures gave the New Zealand Dollar little cause for confidence at the start of the week. Although activity picked up modestly in the third quarter this was accompanied by another weakening in activity volume.