GBP Exchange Rate News: Pound Firms, But Weak Growth Figures Threaten Gains

Pound (GBP) to Slip on Lacklustre GDP?

The Pound (GBP) trended higher at the start of this week, recouping some of its recent losses in response to easing Brexit uncertainty.

However, the Pound is likely to relinquish a good portion of these gains today with the publication of the UK’s latest GDP estimate.

Economists forecast that today’s data will show that the UK economy stalled at the end of 2019 as the country was paralysed by heightened political uncertainty in the run up to the general election.

 

Euro (EUR) Slumps as Merkel’s Succession in Doubt

The Euro (EUR) fell back on Monday as EUR investors were unsettled by the news that Annegret Kramp-Karrenbauer (AKK) would be resign as leader of Germany’s main governing party the CDU.

AKK was widely expected to succeed Chancellor Angela Merkel when she steps down next year, but her decision has now thrown considerable uncertainty over the political future of the Eurozone’s largest economy.

Looking ahead, the focus for EUR investors today will likely be on a speech by European Central Bank (ECB) president Christine Lagarde, as they look for any hints regarding the bank’s future policy plans.

 

US Dollar (USD) Buoyed by Coronavirus Concerns 

The US Dollar (USD) trended higher through most of yesterday’s trading session as demand for the safe-haven currency remained strong amidst ongoing concerns over the coronavirus outbreak in China.

Economists remain uncertain how severe an impact the outbreak is likely to have on the global economy, driving skittish investors to flock to safe-haven assets like the ‘Greenback’.

Coming up, USD investors will look to Jerome Powell’s semi-annual testimony on monetary policy for fresh impetus as the Federal Reserve Chair delivers his latest assessment of the US economy.

 

Canadian Dollar (CAD) Subdued as Oil Prices Slip

The Canadian Dollar (CAD) was mostly rangebound through Monday’s session, with the commodity-linked ‘Loonie’ struggling to find support as WTI crude fell back to $50 a barrel amidst concerns the coronavirus outbreak will hit oil demand in China. 

 

Australian Dollar (AUD) Rebounds from Decade Low

The Australian Dollar (AUD) rallied overnight on Monday, rebounding from a decade low against the US Dollar (USD) as AUD sentiment was buoyed by expectations of more stimulus measures from China to help offset the impact of the coronavirus outbreak.

 

New Zealand Dollar (NZD) Muted ahead of RBNZ Rate Decision

The New Zealand Dollar (NZD) traded in a narrow range at the start of this week as markets brace for the conclusion of the Reserve Bank of New Zealand’s (RBNZ) first policy meeting of 2020 later tonight. 

No policy changes are expected from the RBNZ this month, but any hints of a rate cut in its forward guidance could weigh heavily on the ‘Kiwi’.

Matthew Andrews

Contact Matthew Andrews


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